Marcelo Lima of Heller House presents ServiceNow (NOW) at a current price of $100.42 per share, framing the company within the long arc of technological revolutions—from looms and textiles through steam and rail, oil and mass production, and now computers and the internet—to argue that ServiceNow sits at the center of the current wealth-creation wave. The thesis rests on the platform’s ability to replace the sprawling, form-choked bureaucracy of enterprise IT with unified workflow automation, and increasingly with agentic AI. Lima points to consolidation onto a single platform as evidence of durability: deals spanning two to four products grew from 72% of net-new annual contract value in 2021 to 91% in 2025, deals involving five or more Now Assist products rose 7.5x year over year, and deals with five or more technology products grew more than 50%. The economic argument is that in a typical support operation of twenty analysts, twenty workstations, and a full software stack costing roughly $1 million, labor accounts for about 90% of the budget while ServiceNow represents under 2%; with agentic AI, five analysts plus AI agents can do the same work while ServiceNow’s share of spend rises more than 5x and the customer still saves over 65% of its budget. He supports the land-and-expand model with an illustrative AI Assist curve reaching 4.5x initial entitlement across ITSM, CSM, and HRSD despite seat erosion, cohort data showing the 2011 customers growing from $100 of initial ACV to $3,520 (228% growth), and renewal rates holding at 97–98% from Q1-25 through Q1-26.
On valuation, Lima notes ServiceNow’s historically rich multiple has compressed sharply even as the underlying business has compounded—revenue at 22.4%, 23.6%, and 28.1% over three, five, and ten years, free cash flow at 29.4%, 24.0%, and 34.6%, and GAAP EPS above 60% over three and five years, against stock-based compensation growth of 11.7% to 22.2%. Looking ahead five years, he models revenue CAGR of 14% to 18% (the low end missing the company’s FY30 goal, the high end reaching the bottom of it) and FCF-per-share growth of 16% to 28%, driven by guided margin expansion and buybacks, which would imply FY30 P/FCF multiples of 11x to 7x, or 15x to 9x excluding stock-based compensation. Pulling the assumptions together—16% revenue growth, 1.1 percentage points of margin expansion, a -2.0% average cash return, 22% FCF-per-share growth, and a re-rating from an entry multiple of 14x FCF to an exit of 23x—Lima arrives at a projected internal rate of return of 26%.
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