Why Bernstein Calls ServiceNow (NOW) a Discount Large-Cap Growth Stock

Bernstein called ServiceNow a “discount large cap growth” opportunity, stating that it appears relatively cheap as compared to other large-cap software peers with market capitalizations above $50 billion when evaluated on a three-year growth versus price-to-free-cash-flow basis.

Analysts noted that the premium historically assigned to high-growth software has eroded further, leaving NOW trading at lower multiples despite rising forecasts for fiscal 2028 growth.

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Bernstein projects a 30 basis point currency-constant subscription revenue beat for NOW as artificial intelligence reaches $1.2 billion in annual contract value in FY26, compared to the company’s $1 billion guidance.

“And note: there is potential conservatism in the company and our model — neither include upside from early consumption-driven renewals. Some customers from the FY24 AI cohort ($200MM+ ACV) could require early incremental AI token renewals in the 2nd half of FY26, based on their reported rapid pace of token consumption.”

ServiceNow, Inc. (NYSE:NOW) provides a platform that integrates workflows, data, and AI to coordinate how work flows across large organizations.

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Disclosure: None. This article is originally published at Insider Monkey.