# NOW – ServiceNow – DCF (2026-11-11)

DCF Analyst model, rerun by Fair Value Coordinator on today's data. Input file: `data/2026-11-11/NOW.md`. Generated 2026-11-11 07:16 MST (Phoenix).

**Price used:** $99.61 (regular-session close Nov 10, 2026). Shares 1,038M (diluted/implied, Yahoo impliedSharesOutstanding per Data Collector 2026-11-11).

| Scenario | $/share | vs price | Start rev growth | FCF margin (after SBC) yr1→yr5 | WACC | g |
|---|---|---|---|---|---|---|
| Bear | $29.06 | -71% | 9.3% fading to 3.9% | 13.4% → 13.4% | 10.5% | 2.5% |
| Base | **$48.15** | -52% | 16.8% fading to 5.4% | 15.7% → 15.7% | 9.5% | 2.5% |
| Bull | $59.40 | -40% | 18.7% fading to 5.7% | 15.7% → 15.7% | 8.5% | 2.5% |

## WACC build
- Risk-free: 10Y UST 5.0% (Nov 10, 2026 close per Data Collector; bond market closed Nov 11 for Veterans Day)
- Beta: 0.98 (5Y observed (Data Collector)); ERP 5.0% → cost of equity 9.9%
- Cost of debt: 10Y + 1.0% spread (assumption; no interest-rate data in inputs) = 6.0% pre-tax, 4.7% after 21% tax
- Weights (market): equity 92.5% / debt 7.5% (mkt cap $103.4B, debt $8.4B)
- WACC 9.5% → **9.5%**

## Key assumptions
| Item | Value | Basis |
|---|---|---|
| TTM revenue | $15.4B | Data Collector |
| TTM OCF / capex / FCF | $5.3B / $-0.6B / $4.8B | Data Collector |
| TTM SBC | $2.3B (15.1% of rev; 48.9% of FCF) | stockanalysis cash-flow, TTM to Sep 30 2026 |
| FCF after SBC (base yr-0) | $2.4B = 15.7% margin | OCF − capex − SBC |
| Consensus revenue | FY1 (FY ending Dec 31, 2026): $16.2B; FY2 $19.3B (FY2/FY1 18.7%); 3Y CAGR 19.7% | Data Collector |
| Consensus FCF FY1 | $5.8B | Data Collector (pre-SBC) |
| Consensus-level start growth | 18.7% = lower of 3Y CAGR and FY2/FY1 | conservative |
| Base / bear / bull start growth | 16.8% (90%) / 9.3% (50%) / 18.7% (100%) of consensus; linear fade toward g | |
| Net cash (debt) | $-1.4B | Data Collector |
| Margin | Base/bull flat at TTM after-SBC margin; bear 85% of it | team default |

## Base-case 5-year FCF ($B)
| Year | Rev growth | Revenue | FCF margin | FCF | PV |
|---|---|---|---|---|---|
| 1 | 16.8% | 18.0 | 15.7% | 2.8 | 2.6 |
| 2 | 13.9% | 20.5 | 15.7% | 3.2 | 2.7 |
| 3 | 11.1% | 22.8 | 15.7% | 3.6 | 2.7 |
| 4 | 8.2% | 24.7 | 15.7% | 3.9 | 2.7 |
| 5 | 5.4% | 26.0 | 15.7% | 4.1 | 2.6 |

## Terminal value check (base)
- Gordon TV $60.0B, PV $38.1B; EV $51.4B; TV share of EV 74.1%
- Implied exit multiple 14.7x year-5 FCF vs current EV/FCF TTM 22.1x (pre-SBC)
- FCF margin (after SBC, flat, base growth/WACC) needed to justify $99.61: **32.1%** vs TTM 15.7%

## Sensitivity – base case $/share (WACC vs terminal g)
| WACC \ g | 2.0% | 2.5% | 3.0% |
|---|---|---|---|
| 8.5% | $52.99 | $56.65 | $60.97 |
| 9.0% | $49.00 | $52.07 | $55.66 |
| 9.5% | $45.53 | $48.15 | $51.17 |
| 10.0% | $42.51 | $44.75 | $47.32 |
| 10.5% | $39.84 | $41.78 | $43.99 |

## Sources
- - Yahoo Finance quoteSummary API (`price`, `summaryDetail`, `defaultKeyStatistics`, `financialData`, `calendarEvents`, `earningsTrend`, `incomeStatementHistory`): https://query2.finance.yahoo.com/v10/finance/quoteSummary/NOW — fetched Nov 11, 2026, 5:24 AM MST (America/Phoenix) / Nov 11, 2026, 7:24 AM ET
- Yahoo Finance chart API (pre/post included) close/pre-market cross-check: https://query1.finance.yahoo.com/v8/finance/chart/NOW — fetched Nov 11, 2026, 5:24 AM MST (America/Phoenix)
- stockanalysis.com statistics (S&P Global Market Intelligence): https://stockanalysis.com/stocks/now/statistics/ — stats updated Nov 11, 2026, fetched Nov 11, 2026, 5:24 AM MST (America/Phoenix)
- stockanalysis.com forecast (S&P Global Market Intelligence): https://stockanalysis.com/stocks/now/forecast/ — forecast updated Oct 30, 2026, fetched Nov 11, 2026, 5:24 AM MST (America/Phoenix)
- stockanalysis.com financials & cash-flow statement pages: https://stockanalysis.com/stocks/now/financials/ and .../financials/cash-flow-statement/ — fetched Nov 11, 2026, 5:24 AM MST (America/Phoenix)
- Yahoo Finance news search: https://query1.finance.yahoo.com/v1/finance/search?q=NOW — fetched Nov 11, 2026, 5:24 AM MST (America/Phoenix)
- 10-year Treasury (for WACC context): 4.98% on Nov 10, 2026 (latest; Nov 11 is Veterans Day and the Treasury auction/bond market is closed). Source: https://home.treasury.gov daily par yield curve, November 2026 view.
- TTM SBC: https://stockanalysis.com/stocks/now/financials/cash-flow-statement/?p=trailing (fetched 2026-11-11 ~05:25 MST)

## Caveats
- SBC treated as a cash cost (subtracted from FCF) – conservative; pre-SBC values would be materially higher.
- Shares are Yahoo implied/diluted (rerun by Coordinator on data/2026-11-11); cost of debt is a 10Y+100bp assumption.
- Revenue start point is TTM; consensus FY1/FY2 periods may not align with TTM. Mid-year discounting not applied (end-year, conservative).