ServiceNow vs. Pegasystems: Which Workflow Automation Stock Leads Now?
ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.A strong and frequently updated portfolio is helping ServiceNow win customers on a regular basis. NOW had 72 transactions of more than $1 million in net new annual contract value (ACV) in the first quarter of 2025. The company expanded its customer relationships, reaching 508 customers with more than $5 million in ACV at the end of the reported quarter, which represents 20% year-over-year customer growth.NOW's expanding portfolio has been noteworthy. In May 2025, ServiceNow introduced its Core Business Suite, an AI-powered solution designed to streamline and transform core business operations, including HR, finance, procurement, facilities, and legal, by unifying workflows and automating processes across departments to improve efficiency, reduce time to value, and enhance employee experiences.ServiceNow's rich partner base, which includes the likes of Amazon, Microsoft, NVIDIA, Five9, Visa, Snowflake, Zoom, Siemens, Rimini Street, IBM, Genesys, Fujitsu, Equinix, Boomi and Infosys, is a key catalyst for future prospects.
Pegasystems is benefiting from strong demand for its GenAI Blueprint solution, which is an agent that uses AI to combine the company's best practices, as well as clients' and partners' knowledge, to design enterprise workflow applications. More than 1,000 new Blueprints are being created every week, more than double from a few months ago.Building on this momentum, PEGA recently expanded its PEGA Blueprint platform with advanced agentic AI capabilities to accelerate digital transformation by analyzing and converting legacy system assets into modern cloud-ready applications. The latest announcement streamlines legacy analysis, enabling faster, more informed application development.PEGA also announced Powered by Pega Blueprint, a solution enabling system integrators to integrate their own intellectual property and industry expertise into Pega's AI-driven workflow designer. This helps partners deliver faster, more customized enterprise transformation and drive greater client success. PEGA's Gen AI blueprint is being widely adopted by tech giants like Accenture, Cognizant, Infosys, Capgemini, TCS and Wipro for client engagements. In first-quarter 2025, PEGA saw a 13% year-over-year rise in ACV to $1.45 billion, driven by strong demand for Pega GenAI Blueprint.
In the year-to-date period, NOW shares have lost 4.5% while PEGA shares have gained 4%. NOW's share price has declined due to increasing macroeconomic challenges and uncertainty attributed to higher tariffs. The increase in PEGA's shares can be attributed to its expanding portfolio and the growing popularity of its Gen AI Blueprint.
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Valuation-wise, NOW and PEGA shares are currently overvalued as suggested by a Value Score of F and D, respectively.In terms of the forward 12-month Price/Sales, NOW shares are trading at 14.95X, which is higher than PEGA's 5.04X.
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The Zacks Consensus Estimate for NOW's 2025 earnings is pegged at $16.51 per share, which has increased 0.18% over the past 30 days, indicating an 18.61% rise year over year.
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
The Zacks Consensus Estimate for PEGA's 2025 earnings is pegged at $3.30 per share, which has remained unchanged over the past 30 days, indicating an 8.91% increase year over year.
Pegasystems Inc. price-consensus-chart | Pegasystems Inc. Quote
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 6.61%. PEGA's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average surprise of 94.01%. The average surprise of PEGA is higher than that of NOW.
While both NOW and PEGA stand to benefit from the growing workflow automation sector, PEGA offers greater upside potential with its rising adoption of GenAI Blueprint, strong partner engagement, and higher earnings surprise history, driving impressive growth and client success.ServiceNow's robust AI portfolio and strong partner base are expected to drive its clientele. However, unfavorable forex amid a challenging macroeconomic environment, stiff competition and lingering concerns related to tariffs are a concern.Currently, PEGA carries a Zacks Rank #2 (Buy), making the stock a stronger pick than NOW, which has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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