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Why Shares of ServiceNow Stock Were Rising This Week
Key Points
ServiceNow reported earnings late last week.
It beat guidance and raised its full-year revenue projections.
Shares of the stock are still in a larger drawdown.
Shares of ServiceNow (NYSE: NOW) have jumped by as much as 13.8% this week, according to data from S&P Global Market Intelligence. The software provider reported earnings last week and raised its full-year guidance, prompting investors to buy the stock. As a software stock, shares have still suffered a massive drawdown over the last 12 months, down 41%.
As of this writing at 11:50 AM EST on Friday, July 31, ServiceNow is up 11.4% this week.
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Earnings boost leading to recovery
Late last week, ServiceNow reported its Q2 2026 earnings. It beat previous guidance for subscription revenue, which grew 23% year-over-year in constant currency to $3.88 billion. For the full year, ServiceNow is now guiding to $15.76 billion in subscription revenue, which is set to grow to $30 billion by 2030.
Importantly, it expects much of this revenue to come from AI services as it works to embed modern tools into its existing software to orchestrate complex workflows across enterprises.
Image source: Getty Images.
Is ServiceNow a buy?
ServiceNow stock has begun to rebound, but is still trading at one of its lowest price-to-sales ratios (P/S) in years. As of this writing, its sales multiple is 7.8, and will keep falling if it can compound revenues from now through 2030. Assuming strong profit margins, ServiceNow stock could be a buy after this week's rebound.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool has a disclosure policy.