ServiceNow Inc. (NYSE:NOW)

The price-to-book value (P/BV) ratio has exhibited considerable fluctuation over the observed period. Initially, the ratio demonstrated an increasing trend from 2013 through 2017, followed by periods of decline and subsequent stabilization, and finally a significant decrease in the most recent year.

Initial Growth (2013-2017)

From March 2013 to February 2017, the P/BV ratio increased from 19.86 to 37.73. This suggests a growing investor confidence in the company’s ability to generate value relative to its book value. The increase indicates that the market was willing to pay a higher premium for each dollar of net assets.

Volatility and Moderation (2018-2022)

Following 2017, the P/BV ratio experienced volatility. It peaked at 48.15 in 2018 before declining to 30.36 by 2022. While fluctuations occurred, the ratio generally remained above 30 during this period, indicating continued, albeit moderated, investor optimism. The concurrent increase in book value per share contributed to this relative stability.

Recent Decline (2023-2026)

A notable decrease in the P/BV ratio is observed from 2023 onwards. The ratio fell to 18.36 in 2023 and further decreased to 9.42 in 2026. This substantial decline, despite continued growth in book value per share, suggests a significant shift in market perception. Investors appear to be assigning a lower valuation to the company’s net assets, potentially reflecting concerns about future growth prospects or increased risk. The share price decreased significantly in 2025, contributing to this decline.

Book Value Per Share Trend

Throughout the entire period, book value per share generally increased, moving from $0.37 in 2013 to $12.39 in 2026. This consistent growth in book value contrasts with the fluctuating P/BV ratio, highlighting the importance of market sentiment in determining overall valuation. The most substantial increases in book value per share occurred between 2019 and 2026.

In summary, the P/BV ratio demonstrates a complex pattern of growth, volatility, and recent decline. While the underlying book value per share has consistently increased, market perception, as reflected in the P/BV ratio, has undergone significant shifts, particularly in the latest observed years.