Is ServiceNow Stock Built to Withstand More Downside?
ServiceNow (NOW) stock is down 24.5% in 21 trading days. The recent slide reflects renewed concerns around slowing organic growth and broader AI threats to the SaaS sector, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where ServiceNow stands today.
- Size: ServiceNow is a $121 Bil company with $13 Bil in revenue currently trading at $116.73.
- Fundamentals: Last 12 month revenue growth of 20.9% and operating margin of 13.7%.
- Liquidity: Has Debt to Equity ratio of 0.02 and Cash to Assets ratio of 0.24
- Valuation: ServiceNow stock is currently trading at P/E multiple of 69.4 and P/EBIT multiple of 53.1
- Has returned (median) 56.7% within a year following sharp dips since 2010. See NOW Dip Buy Analysis.
These metrics point to a Very Strong operational performance, alongside Very High valuation – making the stock Attractive but Volatile. For details, see Buy or Sell NOW Stock
That brings us to the key consideration for investors worried about this fall: how resilient is NOW stock if markets turn south? This is where our downturn resilience framework comes in. Suppose NOW stock falls another 20-30% to $82 – can investors comfortably hold on? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- NOW stock fell 51.3% from a high of $140.35 on 4 November 2021 to $68.35 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 December 2023
- Since then, the stock increased to a high of $234.08 on 28 January 2025 , and currently trades at $116.73
| NOW | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -51.3% | -25.4% |
| Time to Full Recovery | 423 days | 464 days |
2020 Covid Pandemic
- NOW stock fell 30.2% from a high of $71.54 on 19 February 2020 to $49.91 on 3 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 5 May 2020
| NOW | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -30.2% | -33.9% |
| Time to Full Recovery | 32 days | 148 days |
2018 Correction
- NOW stock fell 27.2% from a high of $60.46 on 11 July 2019 to $44.00 on 23 October 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 13 January 2020
| NOW | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -27.2% | -19.8% |
| Time to Full Recovery | 82 days | 120 days |
Feeling jittery about NOW stock? Consider portfolio approach.
Move Beyond Single Stocks With A Multi Asset Portfolio
Stocks soar and sink but bonds commodities and other assets balance the ride. A multi asset portfolio keeps returns steadier and reduces single market risk.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices