Comprehensive Stock Comparison
Compare ServiceNow, Inc. (NOW) vs Shopify Inc. (SHOP) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | SHOP | 30.1% revenue growth vs NOW's 20.9% |
| Value | NOW | Lower P/E (25.8x vs 65.9x), PEG 0.37 vs 2.25 |
| Quality / Margins | NOW | 13.2% net margin vs SHOP's 10.7% |
| Stability / Safety | NOW | Beta 1.52 vs SHOP's 2.23 |
| Dividends | Tie | Neither pays a meaningful dividend |
| Momentum (1Y) | SHOP | +7.8% vs NOW's -88.4% |
| Efficiency (ROA) | SHOP | 8.1% ROA vs NOW's 6.7%, ROIC 9.4% vs 12.4% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
ServiceNow is a leading enterprise cloud platform that automates digital workflows across IT, customer service, HR, and security operations. It generates revenue primarily through subscription fees for its Now platform — with IT service management being its largest segment — and professional services. The company's competitive moat lies in its unified workflow automation platform that creates strong network effects and high switching costs as customers expand across departments.
Shopify is a comprehensive commerce platform that enables businesses of all sizes to create online stores, manage sales across multiple channels, and handle operations like payments, shipping, and inventory. It generates revenue primarily through subscription fees for its platform tiers — which account for about 30% of revenue — and merchant solutions like payment processing, shipping, and capital advances that make up the remaining 70%. The company's key advantage is its integrated ecosystem that combines easy-to-use store creation tools with a vast app marketplace and fulfillment network, creating high switching costs for merchants as they grow their businesses.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
NOW leads in 2 of 6 categories (Financial Metrics, Valuation Metrics). SHOP leads in 2 (Profitability & Efficiency, Total Returns). 1 tied.
Financial Metrics (TTM)
NOW and SHOP operate at a comparable scale, with $13.3B and $11.6B in trailing revenue. Profitability is closely matched — net margins range from 13.2% (NOW) to 10.7% (SHOP). On growth, SHOP holds the edge at +30.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | NOWServiceNow, Inc. | SHOPShopify Inc. |
|---|---|---|
| RevenueTrailing 12 months | $13.3B | $11.6B |
| EBITDAEarnings before interest/tax | $2.6B | $1.5B |
| Net IncomeAfter-tax profit | $1.7B | $1.2B |
| Free Cash FlowCash after capex | $4.6B | $2.0B |
| Gross MarginGross profit ÷ Revenue | +77.5% | +48.1% |
| Operating MarginEBIT ÷ Revenue | +13.7% | +12.7% |
| Net MarginNet income ÷ Revenue | +13.2% | +10.7% |
| FCF MarginFCF ÷ Revenue | +34.5% | +17.4% |
| Rev. Growth (YoY)Latest quarter vs prior year | +20.7% | +30.6% |
| EPS Growth (YoY)Latest quarter vs prior year | +2.7% | -42.0% |
Valuation Metrics
At 64.7x trailing earnings, NOW trades at a 50% valuation discount to SHOP's 128.4x P/E. Adjusting for growth (PEG ratio), NOW offers better value at 0.93x vs SHOP's 4.38x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | NOWServiceNow, Inc. | SHOPShopify Inc. |
|---|---|---|
| Market CapShares × price | $113.1B | $157.4B |
| Enterprise ValueMkt cap + debt − cash | $112.6B | $156.1B |
| Trailing P/EPrice ÷ TTM EPS | 64.68x | 128.44x |
| Forward P/EPrice ÷ next-FY EPS est. | 25.81x | 65.90x |
| PEG RatioP/E ÷ EPS growth rate | 0.93x | 4.38x |
| EV / EBITDAEnterprise value multiple | 43.94x | 104.11x |
| Price / SalesMarket cap ÷ Revenue | 8.52x | 13.62x |
| Price / BookPrice ÷ Book value/share | 8.72x | 11.69x |
| Price / FCFMarket cap ÷ FCF | 24.71x | 78.44x |
Profitability & Efficiency
NOW delivers a 13.5% return on equity — every $100 of shareholder capital generates $13 in annual profit, vs $9 for SHOP. SHOP carries lower financial leverage with a 0.01x debt-to-equity ratio, signaling a more conservative balance sheet compared to NOW's 0.25x. On the Piotroski fundamental quality scale (0–9), SHOP scores 6/9 vs NOW's 3/9, reflecting solid financial health.
| Metric | NOWServiceNow, Inc. | SHOPShopify Inc. |
|---|---|---|
| ROE (TTM)Return on equity | +13.5% | +9.1% |
| ROA (TTM)Return on assets | +6.7% | +8.1% |
| ROICReturn on invested capital | +12.4% | +9.4% |
| ROCEReturn on capital employed | +13.2% | +11.0% |
| Piotroski ScoreFundamental quality 0–9 | 3 | 6 |
| Debt / EquityFinancial leverage | 0.25x | 0.01x |
| Net DebtTotal debt minus cash | -$523M | -$1.4B |
| Cash & Equiv.Liquid assets | $3.7B | $1.5B |
| Total DebtShort + long-term debt | $3.2B | $188M |
| Interest CoverageEBIT ÷ Interest expense | 126.61x | — |
Total Returns (with DRIP)
A $10,000 investment in SHOP five years ago would be worth $9,216 today (with dividends reinvested), compared to $1,941 for NOW. Over the past 12 months, SHOP leads with a +7.8% total return vs NOW's -88.4%. The 3-year compound annual growth rate (CAGR) favors SHOP at 43.2% vs NOW's -37.0% — a key indicator of consistent wealth creation.
| Metric | NOWServiceNow, Inc. | SHOPShopify Inc. |
|---|---|---|
| YTD ReturnYear-to-date | -26.7% | -23.2% |
| 1-Year ReturnPast 12 months | -88.4% | +7.8% |
| 3-Year ReturnCumulative with dividends | -75.0% | +193.5% |
| 5-Year ReturnCumulative with dividends | -80.6% | -7.8% |
| 10-Year ReturnCumulative with dividends | +96.4% | +5294.6% |
| CAGR (3Y)Annualised 3-year return | -37.0% | +43.2% |
Risk & Volatility
NOW is the less volatile stock with a 1.52 beta — it tends to amplify market swings less than SHOP's 2.23 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. SHOP currently trades 66.3% from its 52-week high vs NOW's 10.2% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | NOWServiceNow, Inc. | SHOPShopify Inc. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.52x | 2.23x |
| 52-Week HighHighest price in past year | $1057.39 | $182.19 |
| 52-Week LowLowest price in past year | $98.00 | $69.84 |
| % of 52W HighCurrent price vs 52-week peak | +10.2% | +66.3% |
| RSI (14)Momentum oscillator 0–100 | 30.9 | 48.7 |
| Avg Volume (50D)Average daily shares traded | 15.0M | 10.0M |
Analyst Outlook
Wall Street rates NOW as "Buy" and SHOP as "Buy". Consensus price targets imply 81.7% upside for NOW (target: $196) vs 36.8% for SHOP (target: $165).
| Metric | NOWServiceNow, Inc. | SHOPShopify Inc. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $196.29 | $165.16 |
| # AnalystsCovering analysts | 67 | 63 |
| Dividend YieldAnnual dividend ÷ price | — | — |
| Dividend StreakConsecutive years of raises | — | — |
| Dividend / ShareAnnual DPS | — | — |
| Buyback YieldShare repurchases ÷ mkt cap | +1.6% | 0.0% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| ServiceNow, Inc. (NOW) | 100 | 34.26 | -65.7% |
| Shopify Inc. (SHOP) | 100 | 270.68 | +170.7% |
Shopify Inc. (SHOP) returned -8% over 5 years vs ServiceNow, Inc. (NOW)'s -81%.
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| ServiceNow, Inc. (NOW) | $1.4B | $13.3B | +854.9% |
| Shopify Inc. (SHOP) | $389M | $11.6B | +2868.2% |
ServiceNow, Inc.'s revenue grew from $1.4B (2016) to $13.3B (2025) — a 28.5% CAGR. Shopify Inc.'s revenue grew from $389M (2016) to $11.6B (2025) — a 45.8% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| ServiceNow, Inc. (NOW) | -32.5% | 13.2% | +140.5% |
| Shopify Inc. (SHOP) | -9.1% | 10.7% | +217.3% |
ServiceNow, Inc.'s net margin went from -32% (2016) to 13% (2025). Shopify Inc.'s net margin went from -9% (2016) to 11% (2025).
Chart 4P/E Ratio History — 6 Years
| Stock | 2019 | 2025 | Change |
|---|---|---|---|
| ServiceNow, Inc. (NOW) | 443.9 | 91.7 | -79.3% |
| Shopify Inc. (SHOP) | 435.4 | 171.2 | -60.7% |
ServiceNow, Inc. has traded in a 92x–444x P/E range over 3 years; current trailing P/E is ~65x. Shopify Inc. has traded in a 61x–435x P/E range over 4 years; current trailing P/E is ~128x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| ServiceNow, Inc. (NOW) | -0.55 | 1.67 | +403.6% |
| Shopify Inc. (SHOP) | -0.04 | 0.94 | +2332.8% |
ServiceNow, Inc.'s EPS grew from $-0.55 (2016) to $1.67 (2025). Shopify Inc.'s EPS grew from $-0.04 (2016) to $0.94 (2025).
Chart 6Free Cash Flow — 5 Years
ServiceNow, Inc. generated $5B FCF in 2025 (+155% vs 2021). Shopify Inc. generated $2B FCF in 2025 (+314% vs 2021).
NOW vs SHOP: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is NOW or SHOP a better buy right now?
ServiceNow, Inc. (NOW) offers the better valuation at 64.7x trailing P/E (25.8x forward), making it the more compelling value choice. Analysts rate ServiceNow, Inc. (NOW) a "Buy" — based on 67 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — NOW or SHOP?
On trailing P/E, ServiceNow, Inc. (NOW) is the cheapest at 64.7x versus Shopify Inc. at 128.4x. On forward P/E, ServiceNow, Inc. is actually cheaper at 25.8x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: ServiceNow, Inc. wins at 0.37x versus Shopify Inc.'s 2.25x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — NOW or SHOP?
Over the past 5 years, Shopify Inc. (SHOP) delivered a total return of -7.8%, compared to -80.6% for ServiceNow, Inc. (NOW). A $10,000 investment in SHOP five years ago would be worth approximately $9K today (assuming dividends reinvested). Over 10 years, the gap is even starker: SHOP returned +52.9% versus NOW's +96.4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — NOW or SHOP?
By beta (market sensitivity over 5 years), ServiceNow, Inc. (NOW) is the lower-risk stock at 1.52β versus Shopify Inc.'s 2.23β — meaning SHOP is approximately 46% more volatile than NOW relative to the S&P 500. On balance sheet safety, Shopify Inc. (SHOP) carries a lower debt/equity ratio of 1% versus 25% for ServiceNow, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — NOW or SHOP?
ServiceNow, Inc. (NOW) is the more profitable company, earning 13.2% net margin versus 10.7% for Shopify Inc. — meaning it keeps 13.2% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: NOW leads at 13.7% versus 12.7% for SHOP. At the gross margin level — before operating expenses — NOW leads at 77.5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is NOW or SHOP more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, ServiceNow, Inc. (NOW) is the more undervalued stock at a PEG of 0.37x versus Shopify Inc.'s 2.25x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, ServiceNow, Inc. (NOW) trades at 25.8x forward P/E versus 65.9x for Shopify Inc. — 40.1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for NOW: 81.7% to $196.29.
07Which pays a better dividend — NOW or SHOP?
None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.
08Is NOW or SHOP better for a retirement portfolio?
For long-horizon retirement investors, ServiceNow, Inc. (NOW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding. Shopify Inc. (SHOP) carries a higher beta of 2.23 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (NOW: +96.4%, SHOP: +52.9%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between NOW and SHOP?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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