ServiceNow (NYSE:NOW | NOW Price Prediction) at $112.86 as of July 13 stands out as a compelling setup for retirement-focused investors heading into the company’s July 22 report. The stock is down more than 23% year to date and more than 41% over the past year, while the underlying business is accelerating. That gap is the opportunity.
Growth Is Accelerating Into the Report
Q4 FY25 revenue grew 20.66% YoY to $3.568 billion, and current remaining performance obligations, the cleanest forward-demand metric in enterprise software, climbed 25% YoY to $12.85 billion. Management guided FY26 subscription revenue to $15.53 billion to $15.57 billion, with a 32% non-GAAP operating margin and a 36% free cash flow margin.
Now Assist net new ACV more than doubled YoY, and the company has beaten EPS estimates in all four quarters of FY25. CEO Bill McDermott called it a “Rule of 55+ profile”, and the math backs him up.
Capital Return Is About to Get Loud
The board authorized an additional $5 billion under the buyback in January and telegraphed an imminent $2 billion accelerated share repurchase. With shares near multi-year lows after the 5-for-1 split, every dollar of that ASR retires more stock than it would have six months ago. Free cash flow reached $4.576 billion in FY25, up 34%, funding the return with zero leverage. For retirees running a compounder strategy, that combination of buyback velocity and expanding margin is exactly the setup.
Wins the Head-to-Head vs. Salesforce
The obvious alternative is Salesforce (NYSE:CRM). Salesforce is down roughly a third this year on AI disruption fears and just spent $3.6 billion on an acquisition the market read as defensive. ServiceNow grew subscription revenue 21% YoY with margins expanding to 31%. Salesforce trails on both metrics. Microsoft (NASDAQ:MSFT) around $378 is the safer AI name, but its revenue growth is a fraction of ServiceNow’s, and it lacks the specific July 22 catalyst.
The Signal Nobody Is Talking About
Options desks are leaning bullish into the report. The full-chain put/call ratio sits at 0.33, with the July 17 expiry at 0.30, unusually skewed toward calls. Insiders agree: 101 recent insider transactions with net buying direction. Sell-side consensus stands at 43 buys against 1 sell, with a $141.12 target.
The setup into July 22 is worth watching closely.
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