Is ServiceNow, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for ServiceNow, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently considered overvalued, with a P/E ratio of 139, a Price to Book Value of 21.05, and an EV to EBITDA ratio of 103.99. In comparison to its peers, Microsoft Corp. has a much lower P/E of 36.17 and EV to EBITDA of 22.50, while Oracle Corp. shows a P/E of 51.69, further highlighting ServiceNow's elevated valuation metrics.
Despite a strong performance over the long term, with a 3-year return of 122.58% compared to the S&P 500's 70.41%, the recent year-to-date return of -10.60% versus the S&P 500's 12.22% suggests that the stock may be struggling to maintain its previous momentum. This combination of high valuation ratios and recent performance trends reinforces the conclusion that ServiceNow, Inc. is overvalued in the current market context.