To The Moon

High Price, High Barrier

ServiceNow’s stock recently closed at $1,004.33, brushing against a psychologically daunting threshold for many retail investors. While a high share price may imply strength, it can also act as an unintended gatekeeper. I believe this pricing has begun to limit fresh retail participation, potentially capping demand and thinning out trading activity.

The barrier to entry is rarely just about value

To put numbers around the concern, ServiceNow’s average daily volume over the past ten days has dropped to just 741,602 shares—well below its 90-day average of 1.78 million. By contrast, comparably capitalised peers like $Salesforce.com(CRM)$ ($227B market cap) are seeing closer to 3 million shares trade daily, despite a much lower share price. This divergence supports the idea that NOW’s high price may be throttling participation, especially from smaller portfolios.

Thin air at the top: liquidity fades above the thousand mark

A Strategic Slice Could Expand the Table

From my perspective, this is more than a matter of optics. A well-timed stock split wouldn’t alter ServiceNow’s underlying value, but it would make the shares feel more ownable. If the stock were split ten-for-one, that $1,000 price tag would become a far more approachable $100. While this doesn't change the company’s fundamentals, it certainly changes investor psychology—and that’s often just as powerful in public markets.

We’ve seen this tactic work wonders elsewhere. $Tesla Motors(TSLA)$ 5-for-1 split in 2020 was met with a 3x spike in trading volume and a surge in retail inflows, suggesting that lower nominal prices do, in fact, draw smaller investors in. $Alphabet(GOOGL)$ 20-for-1 split in 2022 led to a 70% rise in average daily trading volumes for several weeks post-split and a noticeable increase in retail ownership. These examples show that splits are not just vanity exercises—they can reshape participation dynamics in very real ways.

A split from $ServiceNow(NOW)$ would align it with this upper echelon of tech and reaffirm its leadership role in enterprise cloud software.

Not Just Symbolic—It’s Tactical

I view a split as more than symbolic. It could bring structural benefits, too. ServiceNow’s institutional ownership currently sits at a whopping 91.5%, leaving just a sliver for retail. A more affordable share price could attract a broader range of investors, which in turn might support deeper liquidity and reduce single-player influence on day-to-day price movement.

Another little-known insight: ServiceNow has never once split its stock. Introducing one now would not only be a historic first but also a clever way to generate renewed media buzz and broaden its retail profile—without any dilution or financial downside.

Of course, a stock split isn’t universally embraced. Some argue that high share prices serve as prestige markers, subtly signalling a company’s maturity and strength. There’s also the view that a split could bring in speculative retail activity, potentially increasing price volatility. However, this argument carries less weight in the context of strong institutional anchors and a beta of just 0.96—suggesting ServiceNow is not especially prone to erratic swings, even with broader ownership.

Strong Enough to Signal Strength

ServiceNow is in no need of gimmicks. Its financials are clean and confidence-inspiring. Revenue has hit $11.47 billion with an 18.6% annual growth rate. Net income sits at $1.54 billion, and levered free cash flow is an impressive $3.71 billion. Add in a modest debt-to-equity ratio of just 23.7% and a solid 16.9% return on equity, and you've got a company that’s not just surviving—it’s thriving.

Growth multiplies when the table is big enough for all

The PE ratio might raise eyebrows at 138.15, but forward estimates bring it down to 62.11, implying strong expected earnings growth. Importantly, the PEG ratio sits at a reasonable 2.29, suggesting investors aren't overpaying by tech-sector standards. So if there were ever a moment to signal long-term conviction with a bold structural move, this is it.

Time to Widen the Circle

ServiceNow’s story is one of consistent growth, high margins, and strong strategic execution. Its $1,000+ share price may be a badge of honour—but it’s also a wall. I believe a stock split now would be a tactical move with long-term upside: it would enhance accessibility, deepen liquidity, and offer a subtle but clear message of confidence from management.

One final consideration is timing. With $ServiceNow(NOW)$ set to report earnings between July 22–28, the lead-up to that event could offer an ideal window for a stock split announcement. Coupling a positive earnings report with a forward-looking structural move would maximise investor attention and reinforce confidence in the company’s trajectory. It would also give the market something more than numbers to digest—namely, a gesture of inclusion and momentum.

There’s nothing broken at ServiceNow. But that’s exactly why now is the perfect time to act—not from a place of necessity, but of strength. Splitting the stock won’t change what makes the company great. It will simply invite more people to take part in its success.

Conclusion:

Let’s call it a growth story with room at the table. ServiceNow has built the banquet—now it’s time to hand out a few more forks.

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