I need service $NOW

u/Himothy8 · Reddit — r/ValueInvesting · January 18, 2026 at 18:24 · ⬆ 14 pts · 💬 28 comments  | View on Reddit ↗
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Original Reddit post

Author runs a DCF on ServiceNow, arguing the market underprices its AI-agent-driven growth and that fair value is $272 versus a conservative $139.

NOW — LONG The author's DCF shows the market pricing in 20% revenue growth for 5 years then 10% for 15 years, yielding a conservative fair value of $139, but the author believes ServiceNow will reaccelerate to low-to-mid 20s growth for the next decade, giving a fair value of $272. The mechanism is ServiceNow's shift to charging based on compute used, positioning it as the 'highway for AI agents' across its three core products (IT workflows 53%, consumer workflows 24%, creator workflows 23%), so as AI agents do more tasks, ServiceNow captures that growth. The main stated risk is that the author used a lower 28% operating margin (22.4% after tax) to account for stock-based compensation, acknowledging the market's more conservative assumptions.

I actually believe Service Now will reaccelerate growth making the low to mid 20s growth for the next decade. When I make those changes to my dcf I actually get a fair value at $272

Score 14
Comments 28
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u/Himothy8 Reddit r/ValueInvesting
ServiceNow undervalued; AI-agent compute model drives growth
The author's DCF shows the market pricing in 20% revenue growth for 5 years then 10% for 15 years, yielding a conservative fair value of $139, but the author believes ServiceNow will reaccelerate to low-to-mid 20s growth for the next decade, giving a fair value of $272. The mechanism is ServiceNow's shift to charging based on compute used, positioning it as the 'highway for AI agents' across its three core products (IT workflows 53%, consumer workflows 24%, creator workflows 23%), so as AI agents do more tasks, ServiceNow captures that growth. The main stated risk is that the author used a lower 28% operating margin (22.4% after tax) to account for stock-based compensation, acknowledging the market's more conservative assumptions.
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This Reddit post, published January 18, 2026, features u/Himothy8 discussing NOW. 1 trade idea extracted by AI with direction and confidence scoring.

Speakers: u/Himothy8  · Tickers: NOW