ServiceNow, Inc. (NOW) vs Veralto Corporation (VLTO): Which Is the Better Buy in 2026?
As of 2026-09-17, NOW is overvalued at $138, with a DCF intrinsic value of $84 and a margin of safety of -65%. VLTO is overvalued at $95, with an intrinsic value of $81 and a margin of safety of -16%. Of the two, VLTO has the wider margin of safety.
Rewards
- ★Gross margin of 74.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Free cash flow has grown at a 27.8% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $3.22 of earning power — management is an exceptional capital allocator.
- ★Veralto Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 60.2% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Veralto Corporation scores 92/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
Risks
- ⚠Despite buyback spending, shares outstanding increased in 3 out of 3 years — stock-based compensation is offsetting repurchases.
- ⚠Each dollar of retained earnings has produced only $0.25 of earning power — shareholders may have been better served by dividends.
- ⚠PEG ratio of 2.27 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $138?
The market implies +27.4% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +12.5%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $95?
The market implies +11.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +13.4%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: NOW vs VLTO
Is ServiceNow, Inc. or Veralto Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, VLTO trades at a -16.4% margin of safety (intrinsic value $81 vs. price $95), compared to NOW's -64.7% margin of safety (intrinsic $84 vs. $138).
Which stock has a wider economic moat, ServiceNow, Inc. or Veralto Corporation?▼
VLTO scores 92/100 (Wide moat), while NOW scores 61/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, ServiceNow, Inc. or Veralto Corporation?▼
ServiceNow, Inc. (NOW) generates a 3.6% free cash flow yield, compared to Veralto Corporation's 3.5%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, ServiceNow, Inc. or Veralto Corporation?▼
VLTO earns 14.4% ROIC versus NOW's 2.3%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.