“Look Beyond the Drop,” Say Analysts after ServiceNow Stock (NOW) Pulls Back on Deal Rumors

ServiceNow (NOW) shares came under pressure this week as Wall Street digested reports that the company is in advanced talks to acquire cybersecurity firm Armis for $7 billion, a deal that would mark the largest acquisition in its history. The potential move has sparked bullish reactions from several analysts.

DA Davidson Analyst Says Selloff Is “Overdone”

DA Davidson analyst Gil Luria said Monday’s over 11% drop in NOW shares reflects investor concerns over both the size and valuation of the potential acquisition. Armis reportedly generates about $300 million in annual recurring revenue (ARR), implying a valuation near 23× ARR, a steep multiple even by software‑sector standards.

Despite those concerns, Luria called the selloff “overdone.” He views Armis as an attractive addition to ServiceNow’s expanding security portfolio and believes the long‑term strategic fit outweighs near‑term valuation worries.

Luria lowered his price target to $1,100 (41.6% upside) from $1,250, but maintained a Buy rating, noting the stock still offers meaningful upside.

Mizuho Trims Target but Stays Bullish

Similarly, Mizuho’s Gregg Moskowitz trimmed his price target to $1,050 (35.1% upside) from $1,150, but kept a Buy rating. He said ServiceNow’s updated 2026 outlook continues to support solid growth. Also, the analyst highlighted AI, data modernization, DevOps, next-gen security, and electronic design automation as key trends for software companies.

Moskowitz noted 2026’s low‑teens revenue growth forecast “looks beatable,” offering appealing risk‑reward heading into next year.

Is NOW Stock a Buy or Sell?

Turning to Wall Street, analysts have a Strong Buy consensus rating on NOW stock based on 24 Buys, four Holds, and one Sell assigned in the past three months. Further, the average ServiceNow price target of $1,140.84 per share implies 46.69% upside potential.

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