NOW
ServiceNow, Inc.
$107.93
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 16.1% below fair value
You pay
$107.93
Bear
$76.92
Fair
$128.58
Bull
$189.99
Bear
$76.92
-28.7%
11% stage 1 growth, 11% discount
Fair
$128.58
+19.1%
18% stage 1 growth, 11% discount
Bull
$189.99
+76.0%
23% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
34.8x
Market is pricing in (growth)
16.4%
vs 17.7% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $147.00 from 69 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $128.58 per share.
Warnings
Stock-based employee pay equals 112% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions