ServiceNow: A Bit of a Sticky Wicket

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Now, ServiceNow. A perfectly respectable name, isn’t it? Sounds like a chap who fixes leaky taps and sorts out your plumbing. But this ServiceNow, this is a different beast altogether. A software sort, you see, and one that’s recently taken a bit of a tumble. A 34% drop! Goodness me. The sort of drop that makes your stomach do loop-de-loops. They call it a ‘sell-off,’ which sounds ever so polite for a good, old-fashioned thrashing.

The blokes running the show – puffed-up peacocks, every last one of them – are keen to point out that everything is still ‘spectacular.’ Spectacular, they say! As if throwing money at a problem makes it disappear. They’re churning out these ‘subscriptions’ – little digital chains binding businesses to their services – and the numbers are indeed rather plump. But numbers, my dear reader, can be awfully deceptive. Like a magician’s rabbit, they can vanish into thin air if you’re not careful.

Rapid Growth (Or So They Claim)

They boast about their ‘current remaining performance obligations’ – a mouthful, isn’t it? – climbing to a rather alarming $12.85 billion. Sounds like a mountain of debt to me. And these ‘deals over $1 million’… oh, they’re practically giving the stuff away! Forty percent more of them, they chirp. More suckers, more likely. Apparently, this whole shebang isn’t being disrupted by this ‘AI’ nonsense. In fact, it’s ‘helping.’ Helping whom, I wonder? Certainly not the poor souls who have to actually use the thing.

Their outlook is ‘impressive,’ naturally. Another $15.5 billion in ‘subscriptions’ expected. They’re practically printing money! And yet, one can’t help but feel a little uneasy. It’s like watching a particularly greedy goose waddle towards the cliff edge.

Is AI a Catalyst, a Threat, or Both? (A Riddle Wrapped in a Mystery)

Now, this ‘AI’ business. They’re calling ServiceNow the ‘AI control tower for business reinvention.’ A rather grand title, wouldn’t you say? It’s all very clever, of course, but I suspect it’s mostly smoke and mirrors. Their CEO, a Mr. Bill McDermott (sounds like a plumber, doesn’t he?) is babbling about ‘AI agents and workflows’ being ‘harmonious and synonymous.’ Harmonious! Synonymous! It’s enough to make your head spin.

Apparently, this ‘Now Assist’ thing – a bit of digital fluff they’ve slapped onto their platform – has seen a doubling in ‘net new annual contract value.’ More chains, more suckers. They’ve even deployed this ‘Claude’ – some sort of electronic brain – to over 29,000 employees. Imagine the chaos! The poor dears will be replaced by robots before you can say ‘redundancy.’

And what are they doing with all this extra loot? Buying back their own stock, of course! A rather suspicious activity, if you ask me. It’s like a greedy child hoarding sweets. They’ve already spent nearly $600 million, and they’re planning to spend another $7 billion! A truly astonishing sum. It’s enough to make you wonder what they’re trying to hide.

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So, where does all this leave us? With a rather expensive piece of software, that’s what. It’s a perfectly good business, no doubt, but it’s priced as if it’s going to grow forever. And in this age of digital tomfoolery, that’s a rather bold assumption.

The ‘price-to-sales ratio’ is around 8, and the ‘forward price-to-earnings ratio’ is 24. Numbers, numbers, numbers! It all sounds terribly impressive, but it doesn’t necessarily mean it’s a good buy. They’re hoping you’ll be swept away by the hype, but I suggest you keep your wits about you.

I’m not quite ready to say it’s a ‘buy’ just yet. It might be getting close, but I’m waiting for the price to fall a bit further. I want to see a bit more blood on the carpet before I dive in. After all, a bargain is a bargain, and I’m not afraid to wait for a good one. Just remember, dear reader, in the world of corporate finance, things are rarely what they seem. And those puffed-up peacocks are always trying to pull the wool over your eyes.

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2026-02-24 17:34