Should You Buy Service Now Stock Before the Huge Investor Update? | NOW Stock Analysis

Parkev believes ServiceNow is significantly undervalued, trading at a forward P/E of 20.7, which is near historical lows compared to its usual range of 35 to 55. Parkev states that the company's financial health is robust, evidenced by a first-quarter revenue beat and an increased full-year subscription revenue outlook. Parkev notes that remaining performance obligations (RPO) grew by 25%, which Parkev interprets as a sign of accelerating future revenue.

Parkev highlights the company's role in the 'AI control tower' space, where it helps enterprises manage multiple AI agents and models from providers like Anthropic and OpenAI. Parkev notes that while there is a risk of AI technology substituting ServiceNow's services, the company's ability to integrate these models with governance and human oversight remains a strong value proposition. Additionally, Parkev is looking for updates on the impact of Middle East conflicts on contract closings and more aggressive share buybacks using the $4.2 billion remaining authorization.

Parkev rates ServiceNow as a buy with high conviction, setting a fair value estimate of $159 against a current market price of $104. Parkev points to the company's 25% year-over-year growth in remaining performance obligations (RPO) as a clear sign that future revenue growth is accelerating. Parkev recommends a strategy of buying 75% of a position before the upcoming earnings report and 25% after to mitigate the risk of missing out on potential upside.