NOW

With a market cap of $150.3 billion, ServiceNow, Inc. (NOW) is a leading provider of cloud-based digital workflow solutions that help organizations automate and streamline business operations across industries worldwide. The company offers a comprehensive portfolio of products spanning IT services, customer service, security, risk management, human resources, and workflow automation, enabling enterprises to improve efficiency and enhance user experiences. The Santa Clara, California-based company is slated to announce its fiscal Q3 2026 results after the market closes on Wednesday, Oct. 28. Ahead of the event, analysts expect NOW to report a profit of $0.56 per share, a 5.1% decline from $0.59 per share in the year-ago quarter. It has exceeded Wall Street's earnings expectations in two of the past four quarters while missing on two other occasions. - Dear Nvidia Stock Fans, Mark Your Calendars for October 20 - Charlie Munger Said He Was Still Buying Apartment Complexes 'To Give Me Something To Do' but Ran Them the Opposite Way, 'It's All Deferred Gratification' - GOOGL Stock Earnings Preview: What to Expect From Alphabet's Q3 2026 Report - Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. For fiscal 2026, analysts forecast the business software specialist to post EPS of $2.22, an increase of 13.3% from $1.96 in fiscal 2025. In addition, EPS is anticipated to grow 27.9% year-over-year to $2.84 in fiscal 2027. Shares of ServiceNow have decreased 18.5% over the past 52 weeks, lagging behind the broader S&P 500 Index's ($SPX) 14.5% gain and the State Street Technology Select Sector SPDR ETF's (XLK) 28.7% return over the same period. ServiceNow has underperformed over the past year due to concerns that AI could disrupt traditional IT software spending and threaten its seat-based pricing model. Aggressive acquisitions, heavy AI and cybersecurity investment, and elevated stock-based compensation have also increased concerns about margin pressure and earnings quality. However, analysts' consensus view on NOW stock remains bullish, with a "Strong Buy" rating overall. Out of 46 analysts covering the stock, 38 recommend a "Strong Buy," three "Moderate Buys," three give a "Hold" rating, one "Moderate Sell," and one "Strong Sell." This configuration is slightly more bullish than three months ago, with 37 analysts suggesting a "Strong Buy." The average analyst price target of $158.50, suggesting a potential upside of nearly 6% from current levels. On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

ServiceNow, Inc. (NYSE:NOW) closed at $140.86 on October 9. The stock has returned 58.1% during the last six months, compared to a 24.3% return for the Insider Monkey Billionaire Index and 15.1% for State Street SPDR S&P 500 ETF Trust. A company can add a quarter to its revenue and still report less profit, and what it bought with the difference decides whether that is good news. ServiceNow is deliberately trading this year's earnings for next year's customers. The market has been content to fund that so far, which is itself part of the risk. READ ALSO: 10 Best Undervalued Stocks to Buy in October A software company adding a quarter to its revenue and losing a fifth of its profit has spent the difference somewhere, and the first question is whether it discounted to win the business. It did not. Gross margin is 74.77%, so each dollar of new revenue still arrives with roughly three quarters of it intact. The pricing is holding. The money disappears below that line, in sales headcount and engineering payroll. That is what buying growth looks like on an income statement, and the revenue figure says the buying is working. The cash statement settles it. Free cash flow came in at nearly three times reported net income, so most of what reduced earnings never left the business. Stock-based compensation and amortisation do that, and both run large at a company hiring quickly. A company whose cash improves while its profit falls is usually worth more than the income statement says, and that gap is what we were looking at in the stocks we picked for high returns this year. The one we ranked first is up 24% since January. So profit fell on the income statement while the cash position improved, which is a pairing that favours a patient holder. DON'T MISS: 10 Most Undervalued Quality Stocks to Invest In Nothing above is an argument about valuation, and valuation is where the risk sits. The stock has returned more than double the index over six months, which raises the stakes on every assumption below. It trades at 28.14 times forward earnings on analyst consensus estimates, against a trailing multiple near ninety, and that forward figure assumes the spending stops suppressing profit while the growth rate holds. Both of those have to happen. If growth slows to the high teens while the sales investment continues, the earnings recovery arrives late, and the multiple has a long way to fall. The balance sheet is the one genuinely tight spot. A cash balance well below the debt load gives a current ratio of 0.70. That is not dangerous for a company generating this much cash, and it does remove the option of absorbing a bad year cheaply. Enterprise software is also the segment most exposed to the argument that artificial intelligence compresses seat-based pricing, which is exactly where ServiceNow earns its revenue. Growth bought with payroll has to outlast the payroll, and the alternative is paying far less for growth somebody else already funded, which is the trade on offer across the quality names we found trading under their worth. The honest verdict is that ServiceNow looks expensive on anything reported and defensible on cash. A trailing multiple near ninety leaves no room if the growth rate slips, and the forward multiple of 28.14 is only reasonable if both the growth and the margin recovery arrive on schedule. You are paying for the assumption that enterprises keep consolidating workflow software onto one platform. Price-to-book above eleven tells you the market is valuing the software and the customer relationships rather than anything on the balance sheet. That is appropriate, and it also means there is no floor underneath the valuation. Everything selling into the artificial intelligence buildout carries that same shape, including the semiconductor names billionaires have been buying, where the one they hold most of is up 18% since June. Nothing in these accounts suggests customers are leaving. Revenue grew strongly at a software gross margin, and free cash flow came in at nearly three times reported net income. However, the operating margin is a small fraction of the gross margin, due to sales and engineering payroll. The forward multiple needs both the growth and the margin recovery to arrive. Everything rests on the operating margin, which decides whether the spending ever turns into profit. ServiceNow, Inc. (NYSE:NOW) was held by 115 hedge funds with a combined stake value of about $5.05 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 108 hedge fund holders with a cumulative investment value of around $5.45 billion in the previous quarter. While we acknowledge the potential of NOW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Most Undervalued Quality Stocks to Invest In and 10 Best Stocks to Buy for High Returns in 2026 This article is originally published at Insider Monkey.

- Current Price: $140.86 - Target Price (Mid): ~$302 - Street Target: ~$147 - Potential Total Return: ~114% - Annualized IRR: ~20% / year ServiceNow (NOW:NYSE) closed at $140.86 on October 9, about 42% above its June 30 close of $99.28. Forward earnings did little of the lifting. Per TIKR, NTM normalized earnings per share rose about 4% over that stretch, while the NTM P/E climbed from around 23x to around 31x. The stock is still down 8% in 2026, and third-quarter results arrive after the close on October 28, according to the company's investor relations materials. The run had no single catalyst. Shares closed at $95.46 on July 22, the day of the second-quarter report, and at $105.56 on July 27. On August 27, after Salesforce (CRM) reported, the whole group moved: Salesforce rose 22.6%, and the State Street Software and Services ETF gained 5.2% as investors began treating AI as a complement to software. At the Goldman Sachs Communacopia + Technology Conference on September 9, Chairman and CEO Bill McDermott made the company-specific case. He said seat-based models had not gone away and had "actually increased." He also predicted AI drives "a 4.5x increase in terms of the revenue of the original seat" over a contract's life. That is a forecast, not a reported metric, and ServiceNow has not published the math behind it. He also previewed a simple AI help desk aimed at 500,000 mid-market companies. Flow by ServiceNow, a conversational service desk launched on October 1, fits that description. It targets first-time buyers and satellite teams at existing customers, and it is priced on consumption, with existing customers drawing on AI assists they already hold. Reports differ on timing: SiliconANGLE described Flow as available now, while Constellation Research reported controlled availability with general availability expected in the fourth quarter. Either way, Flow is a live test of McDermott's pitch: revenue that grows with usage. Second-quarter revenue rose 24.01% to $3.987 billion, 1.52% above estimates, per TIKR. ServiceNow'sQ2 results release said strong U.S. federal demand accelerated some on-premise subscription revenue from the third quarter into the second. Non-GAAP free cash flow rose 18.5% to $634 million but missed estimates by 5.99%. Third-quarter guidance calls for subscription revenue of $3.975 billion to $3.980 billion, up 20.5%, and 19.5% growth in cRPO, meaning contract revenue due within 12 months. Analysts on TIKR expect total revenue growth of about 20% and normalized EPS of around $1.03, up about 6%. They project normalized EPS growth of around 23% in 2027. The Street has moved less than the stock. The mean target rose about 4% from June 30, to around $147, as the high target rose from $236 to $248 and the low fell from $85 to $72. At around 31x NTM earnings, ServiceNow trades above Microsoft (MSFT) at around 27x and SAP (SAP) at around 25x, and about double Salesforce at around 16x, per TIKR. - Current Price: $140.86 - Target Price (Mid): ~$302 - Potential Total Return: ~114% - Annualized IRR: ~20% / year TIKR's mid-case targets around $302 by December 31, 2030, about 20% a year over 4.2 years. Street estimates on TIKR, from only six analysts that far out, put 2030 revenue near $32 billion. That is around 19% annual growth from 2025, with normalized net income margins near 29%, and it matches the $32 billion course McDermott set for 2030 on the Q2 call. The primary risk is the multiple: a return to around 23x would undo most of the rally, even if estimates hold. Upside comes if seat expansion and Flow push revenue above that path. The downside comes if cRPO growth falls short of guidance. On October 28, watch cRPO growth against the 19.5% guide. Meeting or beating it despite the federal pull-forward, with subscription revenue at or above $3.980 billion, would support the 31x multiple. A cRPO print below 19.5% would make the June 30 level of around 23x look like the fairer price. TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR's valuation model and see what ServiceNow could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It's free to use. Analyze ServiceNow on TIKR Free →

UiPath’s PATH latest results merit another look after the market has had time to digest them. Shares have fallen 24% since the Sept. 3 release, even though second-quarter fiscal 2027 revenues exceeded expectations and management lifted its annual targets. The reaction appears less about the reported quarter than the outlook’s magnitude and composition: the fiscal third-quarter revenue midpoint sits below the consensus mark, while the modest ARR-guidance increase leaves investors waiting for clearer AI-driven acceleration. That reset, however, creates a more interesting entry point, provided execution continues. Image Source: Zacks Investment Research Fiscal second-quarter revenues rose 13.4% year over year to $410.3 million, beating the $397.8 million consensus mark by 3.1%. Revenues nevertheless have declined 1.9% sequentially from $418.4 million. License revenues increased 10.4% year over year to $123.8 million but fell 17.1% from the fiscal first quarter. Subscription-services revenues advanced 11.6% year over year and 5.2% sequentially to $266.1 million, improving the recurring-revenue mix. Professional services and other revenues surged 81.6% year over year and 25.8% quarter over quarter to $20.3 million, although they remained a small contributor. GAAP gross profit increased 10.9% year over year but declined 3.5% sequentially to $329.7 million. The corresponding gross margin was 80%, down two percentage points both year over year and sequentially. Non-GAAP gross margin similarly contracted to 82% from 84% a year ago and 83% in the prior quarter. Lower operating expenses offset that pressure. GAAP operating income reached $31.6 million, reversing a $20.2 million loss a year earlier and rising 12.9% sequentially. Operating margin improved to 8% from negative 6% and 7% in the prior year and prior quarter, respectively. This marked UiPath’s fourth consecutive quarter of GAAP profitability. Non-GAAP operating income climbed 42.9% year over year to $89 million, though it slipped 3.7% sequentially. Its 22% margin expanded five percentage points year over year and held steady quarter over quarter. Adjusted earnings were 15 cents per share, unchanged both year over year and sequentially. ARR reached $1.938 billion, up 12.5% year over year and 1.9% sequentially. Net new ARR was $37 million, 19.4% above the prior-year quarter but 24.5% below the first quarter’s $49 million. Dollar-based net retention was 109%, improving one percentage point year over year and remaining flat sequentially. Gross retention held at 97%, with attrition concentrated among smaller customers. Image Source: Zacks Investment Research AI appeared in 18 of the quarter’s 20 largest deals, suggesting it is becoming central to enterprise purchases. UiPath’s proposition combines probabilistic AI with rules-based automation, while model neutrality and integrations with major coding assistants broaden its relevance. Larger outcome-oriented contracts could lift deal sizes, but evolving transaction-based pricing makes near-term monetization less predictable. Fiscal third-quarter revenue guidance of $440-$445 million has a $442.5 million midpoint, lower than the $444.3 million Zacks Consensus Estimate. ARR is projected at $1.992-$1.997 billion, implying 2.9% sequential growth at the midpoint, while non-GAAP operating income of roughly $100 million suggests a margin near 22.6%. Full-year revenue guidance increased to $1.789-$1.794 billion from $1.776-$1.781 billion, representing a 0.7% midpoint raise and higher than the current Zacks Consensus Estimate of $1.78 billion. The ARR range moved up just 0.3% at the midpoint to $2.065-$2.070 billion, while non-GAAP operating-income guidance rose 3.5% to $445 million. Adjusted free cash flow is expected to approximate $425 million. The sharper profit revision is encouraging, but the restrained ARR increase helps explain why the market focused on competitive AI risk rather than the headline beat. ServiceNow NOW and Salesforce CRM provide useful benchmarks for UiPath’s AI-automation opportunity. ServiceNow embeds AI agents and workflow orchestration across its enterprise platform, giving it a large installed-base advantage and substantial cross-selling reach. Salesforce similarly connects autonomous agents with customer data, applications and workflows through Agentforce, making it a formidable competitor for enterprise automation budgets. Yet UiPath retains differentiation in deterministic robotic automation, model neutrality and governance across mixed human, software and agent processes. ServiceNow may appeal to customers standardizing IT workflows, while Salesforce is strongest around customer-facing processes. UiPath’s opportunity lies in serving as the controlled execution layer across both domains, especially for complex, regulated operations over the coming investment cycle. Operating cash flow fell 26.2% year over year and 76.7% sequentially to $30.7 million. Adjusted free cash flow was about $31 million, down 31.1% year over year and 76.2% sequentially, reflecting quarterly timing following a strong first quarter. UiPath still ended the period with $1.405 billion in cash and investments, down only 1.1% sequentially, and no debt. It also repurchased 2.4 million shares at an average price of $9.63, providing modest support while preserving substantial financial flexibility. The post-earnings decline has created an attractive entry point for investors willing to tolerate volatility. UiPath is pairing durable recurring-revenue growth with stronger retention, disciplined spending and sustained profitability, while its debt-free balance sheet provides room to keep investing. The market’s concern that general-purpose AI tools could erode traditional automation demand is legitimate, and near-term growth remains measured. However, enterprises still require accuracy, governance and orchestration when automated decisions reach core operations. UiPath’s model-neutral platform is designed for precisely that need. With execution improving and expectations reset after the selloff, the risk-reward balance supports a Buy for patient investors today. PATH stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UiPath, Inc. (PATH) : Free Stock Analysis Report Salesforce, Inc. (CRM) : Free Stock Analysis Report ServiceNow, Inc. (NOW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ServiceNow stock has fallen 22.7% over the past year, yet one key valuation model points to substantial upside while traditional market multiples indicate the shares are already pricing in a lot of quality. Investors are facing a clear split between an intrinsic value estimate that screens the stock as undervalued and broader checks that lean expensive. Over the past 12 months, ServiceNow has declined 22.7%, which means the current valuation debate is happening after a period of weak share price performance rather than at fresh highs. Recent progress in AI driven workflow partnerships and ecosystem integrations can support optimism about future cash flows, while rising competitive pressure from AI native workflow platforms may limit how much investors are willing to pay for that growth. ServiceNow earns a low valuation score of 2 out of 6, which suggests the broader checks lean expensive even though the Discounted Cash Flow (DCF) intrinsic value estimate screens the stock as materially undervalued. The issue now is whether the intrinsic value signal or the richer looking market multiples provide the more reliable guide to where ServiceNow stock should trade from here. Spot 55 AI infrastructure stocks that, like ServiceNow, are tied into the build out of AI-driven workflows and could see sentiment shift quickly when expectations move. The Discounted Cash Flow model projects the cash that ServiceNow can return to shareholders and discounts it back into today’s dollars. For ServiceNow, the latest twelve month free cash flow sits at about $4.3b. The 2 Stage Free Cash Flow to Equity model treats this figure as a base for growing cash generation over time. Based on those projections, the intrinsic value is estimated at $268.92 per share. That Discounted Cash Flow estimate implies the stock appears about 47.5% undervalued compared with the current market price. Recent integrations such as the Pricefx Deal Optimization App inside the ServiceNow AI Platform illustrate how the company is trying to deepen its role in AI driven workflows. However, the market price still sits well below the level that this DCF suggests the cash flows could justify. On this Discounted Cash Flow view, ServiceNow stock currently appears undervalued. Our Discounted Cash Flow (DCF) analysis suggests ServiceNow is undervalued by 47.5%. Track this in your watchlist or portfolio, or discover 47 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ServiceNow. The P/E ratio suits ServiceNow because earnings are a key focus for many investors in mature, high margin software platforms. On this measure, ServiceNow trades on about 87.5x earnings, compared with a Software industry average of roughly 31.2x and a peer group average near 27.9x. That is a sizeable premium to both sector benchmarks. The fair P/E ratio implied by broader checks is about 52.8x, which is still well below the current 87.5x level. This gap suggests the stock screens overvalued on earnings, even after accounting for its quality and business profile. The recent rebound in software stocks and renewed interest in AI workflow platforms have supported sentiment, but the current P/E already asks investors to pay a high price for ServiceNow’s earnings stream. On the P/E multiple, ServiceNow stock currently looks overvalued relative to what the earnings profile would usually justify. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for ServiceNow pick up where this valuation split leaves off and explain what growth, margin and earnings paths would need to occur for the stock to be worth materially more or less than today's price. Each one presents ServiceNow's fair value as a thesis about how the business could develop over time, so you can see how that view holds up as new information arrives. They are available on Simply Wall St's Community page. Community views on ServiceNow sit far apart, with some investors focused on its AI workflow upside and others worried about how that is funded and priced. Bull case: 17% undervalued Read the full Bull Case to see why ServiceNow could be undervalued Bear case: 72% overvalued Read the full Bear Case to see why ServiceNow could be overvalued Do you think there's more to the story for ServiceNow? Head over to our Community to see what others are saying! For ServiceNow, the Discounted Cash Flow (DCF) view suggests meaningful upside on intrinsic value, while the P/E based checks flag the stock as overvalued on earnings relative to peers. That tension comes down to whether the company can translate its AI workflow ambitions into cash flows that arrive fast enough to justify paying such a high multiple today. Broader valuation checks remain weak despite the supportive DCF signal. The key question from here is whether future execution on AI driven workflows changes sentiment and closes the gap between rich market multiples and the intrinsic value estimate. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NOW. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

A month has gone by since the last earnings report for Dynatrace (DT). Shares have added about 8% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Dynatrace due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Dynatrace, Inc. before we dive into how investors and analysts have reacted as of late. Dynatrace reported first-quarter fiscal 2027 adjusted earnings of 48 cents per share, beating the Zacks Consensus Estimate by 6.67%. The bottom line increased 14.3% year over year, supported by revenue upside and disciplined spending.Revenues of $554.55 million rose 16.2% and topped the consensus mark by 0.96%. Annual recurring revenues, or ARR, reached $2.136 billion, up 17%, as organic net new ARR growth accelerated 41%. Subscription revenues increased 15.9% year over year to $530.26 million and accounted for most of quarterly sales. Management linked the performance to strong net new ARR, growing platform consumption, and enterprise demand for end-to-end observability.Services revenues rose 22.4% year over year to $24.29 million. Total revenues and subscription revenues also exceeded the high end of management’s guidance, each growing 15% on a constant-currency basis. Net new ARR was $85 million, up 66% year over year. Excluding the $13 million contribution from Bindplane, organic net new ARR totaled $73 million, reflecting the company’s fourth consecutive quarter of acceleration in trailing 12-month organic net new ARR growth.Dynatrace added 122 new logos, while average landing size increased to nearly $285,000. Record new-logo ARR growth exceeded 160%, aided by large platform-consolidation transactions, including an eight-figure annual contract value win with a major Latin American financial institution.Gross retention remained in the mid-90% range, while the trailing 12-month net retention rate was 110%. Average ARR per customer increased to well above $500,000, reflecting broader adoption among enterprise clients. Annualized log-management consumption approached $200 million after nearly doubling over two quarters and continued to grow well above 100% year over year. Management expects Bindplane’s open-telemetry capabilities to support data ingestion and further strengthen the logs business.More than 1,000 customers used DT to observe artificial intelligence and large-language-model workloads in production, up from roughly 850 in the prior quarter. More than 800 customers used the company’s agentic capabilities for autonomous operations, up from about 500.Consumption growth among customers using AI capabilities ran 1.5 times above that of non-AI customers. Management identified higher telemetry volumes, AI-observability workloads and direct agent usage as three separate monetization opportunities. For the first quarter of fiscal 2027, non-GAAP gross margin was 84%, down from 85% in the year-ago quarter.On a GAAP basis, research and development expenses increased 25.7% to $135.99 million, reflecting continued platform investment. Sales and marketing expenses rose 9.9% to $181.63 million, while general and administrative expenses increased 9.6% to $61.74 million.Non-GAAP operating income rose 12.9% year over year to $161.60 million, while the related margin was 29% compared with 30% a year earlier. GAAP operating income climbed 14.7% year over year to $71.48 million. The company ended June 30, 2026, with $1.06 billion in cash and cash equivalents. During the quarter, DT repurchased 7.1 million shares for $275 million at an average price of $38.88.Net cash provided by operating activities increased 13.6% year over year to $306.24 million. Adjusted free cash flow rose 17.9% year over year to $309.18 million, with the adjusted free cash flow margin expanding to 56% from 55%. For the second quarter of fiscal 2027, Dynatrace expects revenues of $565-$570 million and subscription revenues of $540-$545 million. Non-GAAP operating margin is projected to be in the range of 29.5%-30%, with adjusted earnings of 48-49 cents per share.For fiscal 2027, management now expects revenues of $2.306-$2.320 billion and ARR of $2.359-$2.379 billion. The company raised the high end of its non-GAAP operating margin outlook to 29.75% and lifted adjusted earnings guidance to $1.97-$1.99 per share.The outlook includes foreign-exchange headwinds of roughly $14 million to ARR and $4 million to revenues. Dynatrace maintained its constant-currency ARR growth forecast of 15.5%-16.5% and adjusted free cash flow margin target of 26.5%. In the past month, investors have witnessed a upward trend in fresh estimates. Currently, Dynatrace has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a score of F on the value side, putting it in the bottom 20% quintile for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Dynatrace has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Dynatrace belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, ServiceNow (NOW), has gained 24.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. ServiceNow reported revenues of $3.99 billion in the last reported quarter, representing a year-over-year change of +24%. EPS of $0.90 for the same period compares with $0.82 a year ago. ServiceNow is expected to post earnings of $1.03 per share for the current quarter, representing a year-over-year change of +7.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for ServiceNow. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dynatrace, Inc. (DT) : Free Stock Analysis Report ServiceNow, Inc. (NOW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NOW has had a steep share price decline over the past five years, yet its valuation signals are split, with a Discounted Cash Flow (DCF) intrinsic value estimate suggesting some upside while market based multiples point the other way. NOW has fallen about 78.0% over the past five years, which puts the current share price in the context of a long and deep drawdown for existing holders. The key support for valuation can come from the company’s ability to convert expected revenue into steady cash flows. A main risk is that weaker execution or higher financing needs delay those cash flows and erode equity value. The broader checks lean expensive for NOW, with a low value score of 1 out of 6 suggesting it is not a clear bargain on most measures. The issue now is whether the DCF based intrinsic value estimate or the richer market multiples are giving the better signal on where NOW stock should trade. Compare NOW’s mixed signals with other companies that screen as potentially better value by scanning the hand picked 258 high quality undervalued stocks list. The Discounted Cash Flow (DCF) model estimates what NOW could be worth based on the cash it is expected to generate for shareholders. For NOW, the latest twelve month free cash flow is about ₱46.0 million and the model assumes that free cash flow grows from this base rather than shrinking. On that basis, the 2 Stage Free Cash Flow to Equity approach points to an intrinsic value of about ₱0.52 per share. Compared with the current share price, this implies the stock trades at roughly a 14.1% discount to the DCF estimate. This result indicates that the market may be placing a cautious price on NOW, even though the modeled cash flows support a slightly higher level, and it also reflects the execution and funding risks mentioned earlier. On these DCF assumptions, NOW stock currently appears undervalued. Our Discounted Cash Flow (DCF) analysis suggests NOW is undervalued by 14.1%. Track this in your watchlist or portfolio, or discover 258 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for NOW. The P/E ratio is a useful cross check for NOW because it ties the share price directly to the earnings that equity holders are paying for today. On this measure, NOW trades on a P/E of about 40.7x, which is more than double the broader IT industry average of around 18.8x. It also sits above the peer group average of roughly 36.3x, so investors are paying a premium price for each unit of current earnings. This gap suggests the market places a higher value on NOW than on many IT peers when judged purely on earnings. That may reflect company specific expectations that are not captured in the sector averages, and it also means the margin of safety on this metric looks tight. If you rely heavily on earnings based comparisons, NOW does not screen as a low multiple opportunity relative to its sector. On the P/E yardstick alone, the stock appears expensive compared with both the IT industry and its peer group. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for NOW pick up where this valuation puzzle leaves off by spelling out which expectations for NOW's growth, margins and earnings would need to hold for the stock to be worth significantly more or less than today’s price. Each narrative links a specific fair value estimate to a clear story about the company’s possible catalysts and risks, so you can track over time which version of events appears to be unfolding. If you have a clear, number driven view on where NOW's growth, margins and execution go from here, consider sharing a Narrative to add your voice to the Simply Wall St community. Set out your case on NOW stock today so you can track how it holds up as future results and market reactions unfold. Do you think there's more to the story for NOW? Head over to our Community to see what others are saying! For NOW, the Discounted Cash Flow (DCF) view points to some intrinsic value upside, while the market multiple view signals the stock is overvalued on earnings. That split hinges on whether future cash flows arrive as projected and whether the current P/E premium is justified by execution. Broader valuation checks are weak, so the burden of proof sits with the idea that cash flows will materialise without heavy dilution or delay. The key question from here is whether NOW can convert expected revenue into dependable free cash flow quickly enough for the current price and high earnings multiple to hold. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NOW. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

A month has gone by since the last earnings report for Vertiv Holdings Co. (VRT). Shares have added about 18.4% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Vertiv due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Vertiv Holdings delivered second-quarter 2026 adjusted earnings of $1.52 per share, up 60% year over year. The results beat the Zacks Consensus Estimate by 6.29%, supported by higher sales volume, operating productivity and margin expansion.Net sales increased 24.1% year over year to $3.27 billion but missed the consensus estimate by 3.41%. Organic sales rose 18%, while acquisitions and favorable foreign exchange contributed 5% and 1%, respectively. Americas net sales rose 29% year over year to $2.07 billion, with organic growth of 21%. Management said that minor timing shifts tied to temporary supply-chain congestion and multi-phased project execution affected second-quarter revenues, but expects the associated delays to resolve in the second half of 2026.Asia Pacific sales advanced 29% year over year to $720 million, including 26% organic growth. Europe, the Middle East and Africa (EMEA) sales increased 2% year over year to $484 million, while organic sales declined 2%. Vertiv expects strengthening demand and pipeline conversion to return EMEA to organic growth in the second half. Product revenues increased 22.2% year over year to $2.65 billion, accounting for about 81% of total sales. Service revenues climbed 32.9% year over year to $627.6 million, outpacing product growth and reflecting demand across Vertiv's installed infrastructure base.The company highlighted strong global pipeline momentum and expects another year of robust order growth. Management cited accelerating activity in the Americas, improving momentum in EMEA and broad-based strength across APAC. Pricing is expected to remain favorable and exceed inflation in 2026. Selling, general and administrative expenses increased 25% year over year to $494.4 million. Adjusted operating profit surged 51% year over year to $738 million, exceeding the midpoint of guidance by $28 million.Adjusted operating margin expanded 410 basis points to 22.6% and came in 140 basis points above guidance. Operational execution, productivity and favorable price-cost performance drove the improvement, partly offset by tariff impacts and continued investments in capacity and engineering research and development.Americas adjusted operating profit increased 48.6% year over year to $571 million. APAC’s adjusted operating profit surged 61.5% to $96 million, while EMEA’s adjusted operating profit rose 19.2% to $124 million. As of June 30, 2026, cash and cash equivalents were $2.81 billion, $300 million in short-term investments and $2.94 billion in long-term debt. Liquidity totaled $5.6 billion, while net leverage was negative 0.1 times, reflecting a net cash position.Net cash provided by operating activities totaled $1.10 billion compared with $322.9 million a year earlier. Adjusted free cash flow increased 234% to $925 million, aided by higher adjusted operating profit, working-capital efficiency and lower cash interest. Capital expenditures are expected to reach about 4% of 2026 sales, the high end of management's range. Vertiv is expanding manufacturing capacity globally while investing in future power architectures, advanced thermal systems, services and converged infrastructure for next-generation AI data centers.The company is also advancing power systems that support both traditional alternating-current infrastructure and emerging 800-volt direct-current designs. Its thermal portfolio includes closed-loop cooling and fluid-management services intended to reduce ongoing water usage and lower water needs during data-center commissioning. For the third quarter of 2026, Vertiv expects net sales of $3.65 billion to $3.85 billion and adjusted earnings of $1.77 to $1.83 per share. Adjusted operating profit is projected to be between $898 million and $938 million, with an adjusted operating margin of 24% to 25%.For 2026, net sales are now forecasted to be in the range of $13.8 billion to $14.2 billion, up $250 million at the midpoint from the prior guidance. Adjusted earnings are projected to be in the range of $6.65 to $6.75 per share, while adjusted operating profit is expected to be between $3.29 billion and $3.37 billion. Adjusted free cash flow guidance was raised to $2.4 billion-$2.6 billion. It turns out, estimates review flatlined during the past month. Currently, Vertiv has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Vertiv has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Vertiv belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, ServiceNow (NOW), has gained 25.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. ServiceNow reported revenues of $3.99 billion in the last reported quarter, representing a year-over-year change of +24%. EPS of $0.90 for the same period compares with $0.82 a year ago. ServiceNow is expected to post earnings of $1.03 per share for the current quarter, representing a year-over-year change of +7.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. ServiceNow has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vertiv Holdings Co. (VRT) : Free Stock Analysis Report ServiceNow, Inc. (NOW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research