Enterprise software is getting smoked. We are experiencing an epic multiple compression in the entire sector. Now is the time to start looking at the best in breed companies, let me draw your attention to the best in the business - Service Now.
With an 84.5% subscription gross margin and 98% renewal rates, ServiceNow has transitioned from a SaaS tool to the indispensable semantic layer of the enterprise.
"Now Assist" has already surpassed $600 million in ACV, more than doubling year-over-year in Q4 2025 alone.
Achieving a Rule of 56 financial profile (21% subscription revenue growth + 35% FCF margin) places them in the top tier of global software companies.
Looking at the technicals, ServiceNow has suffered a 50% drawdown from its highs, pushing the Weekly RSI to 26 (Oversold). This is a "Blood in the Streets" entry point, I am buying the fear (not financial advice).
At the current P/E of 69x (a 33% discount to its 12 month average) and a forward P/E of 28, you are buying the highest quality enterprise asset at its most attractive valuation in years. The stock often retraces to the golden fib, but this time around it didn't hold as support. I believe the weakness may persist well into April 2026 and we may drop another 30% into the 0.786 or the weekly level below. I think we are in Wave 4 of the grand supercycle, we should get one last move in the fifth wave to send this to new highs, but that will take years to play out. Patience is required with this sector. Personally, I am not trying to time the bottom , so I believe NOW is a good time to DCA. There's also levels below that I will continue to add more to this beaten down dog, I have marked the next support level below.
Not financial advice, do what's best for you. If you like my free content and trade ideas, feel free to show me some love by gifting a subscription. When my current sub ends, I will stop posting free content and focus my efforts elsewhere. Thank you for following!
With an 84.5% subscription gross margin and 98% renewal rates, ServiceNow has transitioned from a SaaS tool to the indispensable semantic layer of the enterprise.
"Now Assist" has already surpassed $600 million in ACV, more than doubling year-over-year in Q4 2025 alone.
Achieving a Rule of 56 financial profile (21% subscription revenue growth + 35% FCF margin) places them in the top tier of global software companies.
Looking at the technicals, ServiceNow has suffered a 50% drawdown from its highs, pushing the Weekly RSI to 26 (Oversold). This is a "Blood in the Streets" entry point, I am buying the fear (not financial advice).
At the current P/E of 69x (a 33% discount to its 12 month average) and a forward P/E of 28, you are buying the highest quality enterprise asset at its most attractive valuation in years. The stock often retraces to the golden fib, but this time around it didn't hold as support. I believe the weakness may persist well into April 2026 and we may drop another 30% into the 0.786 or the weekly level below. I think we are in Wave 4 of the grand supercycle, we should get one last move in the fifth wave to send this to new highs, but that will take years to play out. Patience is required with this sector. Personally, I am not trying to time the bottom , so I believe NOW is a good time to DCA. There's also levels below that I will continue to add more to this beaten down dog, I have marked the next support level below.
Not financial advice, do what's best for you. If you like my free content and trade ideas, feel free to show me some love by gifting a subscription. When my current sub ends, I will stop posting free content and focus my efforts elsewhere. Thank you for following!
Trade active
Trade entered at $105, I gave you my first buy level, we have bounced right at the bottom of my green buy zone. The second buy will be below $81, if we get there.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.