ServiceNow, Inc.

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ServiceNow, Inc. stock analysis NOW overview
Slightly Bullish +25

Can EmployeeWorks Become a Major Growth Driver for ServiceNow?

🚀 ServiceNow's EmployeeWorks product grew five times year-over-year in Q1 2026 following its February 2026 launch.

🤖 The platform combines Moveworks' conversational AI and enterprise search with ServiceNow's workflow capabilities to provide a single interface for employees.

💼 Management reported six new EmployeeWorks deals exceeding $1 million in net annual contract value during the first quarter of 2026.

📉 ServiceNow shares have declined 24.7% year-to-date, significantly outperforming the broader Zacks Computers - IT Services industry decline of 12.7%.

💰 The stock is considered overvalued with a forward P/E ratio of 26.17X compared to the industry average of 19.68X and carries a Zacks Rank #4 (Sell).

📈 Analysts project ServiceNow revenue growth of 21.9% in 2026 and 18.2% in 2027 according to consensus estimates.

⚠️ The company faces stiff competition from Salesforce, which recently saw its Agentforce ARR surpass $1 billion in fiscal Q1 2027.

🛠 Atlassian is also competing through solutions like Jira and Rovo, with cloud business growth of 29% year-over-year in fiscal Q3 2026.

🤖 EmployeeWorks aims to improve productivity and reduce support team workload across organizations employing nearly 200 million people.

🔄 The product creates opportunities to sell related offerings like Now Assist and AI Control Tower to existing customers.

📊 Moveworks closed more deals in Q1 under ServiceNow than it did as a standalone company during the entire previous year.

🔍 The platform allows employees to use natural language to ask questions and complete actions via Microsoft Teams, Slack, or web browsers.

Bullish Signals
  • EmployeeWorks grew five times year over year in the first quarter of 2026, demonstrating strong early adoption.
  • The company closed six EmployeeWorks deals worth more than $1 million in net new annual contract value during the first quarter.
  • Moveworks closed more deals in the first quarter under ServiceNow than it had closed during the entire previous year as a standalone company.
  • EmployeeWorks is creating opportunities to sell related offerings such as Now Assist and AI Control Tower, expanding presence among existing customers.
  • The Zacks Consensus Estimate for ServiceNow's 2026 earnings indicates a 17.95% increase year over year at $4.14 per share.
  • ServiceNow operates across organizations that collectively employ nearly 200 million people, providing a large addressable market.
Risk Factors
  • ServiceNow shares have declined 24.7% year to date, significantly outperforming the industry's decline of 12.7%, indicating investor concern.
  • The stock trades at a forward P/E of 26.17X compared to the industry average of 19.68X, suggesting it is overvalued relative to peers.
  • ServiceNow carries a Zacks Rank #4 (Sell), reflecting negative analyst sentiment and potential downside risk.
  • The company faces stiff competition from Salesforce's Agentforce, which surpassed $1 billion in ARR in Q1 fiscal 2027 with triple-digit growth, and Atlassian's Jira/Rovo, which grew the cloud business 29% year-over-year.
Full Analysis
ServiceNow has launched EmployeeWorks, a product integrating Moveworks' conversational AI and enterprise search with its workflow platform, which saw five-fold year-over-year growth in the first quarter of 2026. The company closed six deals exceeding $1 million in net new annual contract value during that period, indicating customers are moving beyond AI testing to deployment across organizations. EmployeeWorks provides a single interface for employees via Microsoft Teams, Slack, and web browsers to access information, submit requests, and complete tasks using natural language, aiming to improve productivity and reduce support team workload. The platform is already used in organizations employing nearly 200 million people, with Moveworks closing more deals in the first quarter under ServiceNow than it did as a standalone company in the previous year. ServiceNow plans to leverage EmployeeWorks to sell related offerings like Now Assist and AI Control Tower, expanding its presence among existing customers. The Zacks Consensus Estimate projects 21.9% revenue growth for 2026 and 18.2% for 2027. However, ServiceNow faces competition from Salesforce's Agentforce and Atlassian's Jira and Rovo, with Salesforce's Agentforce ARR surpassing $1 billion in the first quarter of fiscal 2027 and Atlassian's cloud business growing 29% year-over-year. ServiceNow shares have declined 24.7% year to date, trading at a forward P/E of 26.17X compared to the industry average of 19.68X, with a Zacks Rank #4 (Sell).