Can EmployeeWorks Become a Major Growth Driver for ServiceNow?

ServiceNow NOW is seeing strong early results from EmployeeWorks, a product created by combining the conversational AI and enterprise search capabilities of Moveworks with ServiceNow’s employee workflow platform. The company launched EmployeeWorks in February 2026 and has already reported meaningful customer adoption. Management stated that the EmployeeWorks business grew five times year over year in the first quarter of 2026.

The product is also helping ServiceNow win larger deals. During the first quarter, the company closed six EmployeeWorks deals worth more than $1 million in net new annual contract value. Management highlighted this performance as evidence that customers are moving beyond AI testing and are starting to deploy AI tools across their organizations.

EmployeeWorks provides employees with a single interface to access information, submit requests and complete tasks. It works through Microsoft Teams, Slack and web browsers. Here, the employees can use natural language to ask questions and complete actions instead of navigating multiple business applications. The platform combines conversational AI, enterprise search and workflow automation in one offering.

ServiceNow believes EmployeeWorks can improve employee productivity and reduce the workload on support teams. The platform is already being used across organizations that collectively employ nearly 200 million people. Further, management noted that Moveworks closed more deals in the first quarter under ServiceNow than it had closed during the entire previous year as a standalone company.

EmployeeWorks is also creating opportunities for the company to sell related offerings such as Now Assist and AI Control Tower, helping expand its presence among existing customers. The above-mentioned factors show that as companies increase spending on AI-powered productivity tools, EmployeeWorks could become an important growth driver for ServiceNow. The Zacks Consensus Estimate for ServiceNow's 2026 and 2027 revenues indicates year-over-year growth of 21.9% and 18.2%, respectively.

ServiceNow Faces Stiff Competition

ServiceNow is facing stiff competition from the likes of Salesforce CRM and Atlassian TEAM.

Salesforce competes with ServiceNow through its offerings such as Agentforce, Data Cloud and Slack, through which it creates a unified ecosystem and connects customer data with integrated AI across systems, apps and devices. In the first quarter of fiscal 2027, Agentforce’s annual recurring revenues (ARR) surpassed $1 billion, up in triple digits year over year. Salesforce expects this momentum to continue in fiscal 2027, on the back of robust customer demand for its agentic offerings

Atlassian competes with ServiceNow through its suite of cloud-based software solutions, such as Jira, Rovo and Teamwork Graph, which help organizations collaborate and manage their workforce. In the third quarter of fiscal 2026, Atlassian continued to add millions of monthly active users to Rovo, while strong customer engagement across Jira helped the company's cloud business grow 29% on a year-over-year basis.

NOW’s Share Price Performance, Valuation & Estimates

ServiceNow shares have plunged 24.7% year to date compared with the Zacks Computers - IT Services industry’s decline of 12.7%.

NOW’s YTD Price Performance

Image Source: Zacks Investment Research

ServiceNow stock is overvalued, with a forward 12-month price/earnings (P/E) of 26.17X compared with the industry’s 19.68X. NOW has a Value Score of D.

NOW Forward 12 Months (P/E) Valuation Chart

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ServiceNow’s 2026 earnings is pegged at $4.14 per share, unchanged over the past 30 days. The figure indicates a 17.95% increase year over year.

Image Source: Zacks Investment Research

ServiceNow stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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