ServiceNow (NOW) shares plunged 17% today after the company reported its first‑quarter results yesterday. Despite delivering better-than-expected Q1 results, the company’s deal delays, margin pressure, and cautious guidance triggered a sharp selloff and a wave of price target cuts. Nevertheless, Wall Street analysts reaffirmed their positive long‑term views, noting that AI momentum remains strong and that ServiceNow’s position in enterprise automation and AI workflows is still solid.
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Analysts Cut Price Targets but Maintain Long-Term Confidence
DA Davidson’s Gil Luria cut his price target to $190 from $220 but kept a Buy rating. Luria said ServiceNow “reported a solid quarter” despite macro headwinds and highlighted that Now Assist is trending well ahead of estimates. However, he noted that cautious guidance and uncertainty around inorganic contributions hurt sentiment. Still, he remains confident that ServiceNow can continue to gain market share over the long term.
Similarly, Piper Sandler’s Rob Owens lowered his target to $140 from $200 while maintaining a Buy rating. Owens said on-premise deal delays hurt Q1 results, but management’s higher Now Assist ACV target of $1.5 billion shows strong AI momentum. He added that, excluding Armis and FX, the organic outlook was essentially unchanged, and he views the post-earnings valuation, roughly 5x EV/CY27 revenue, as an attractive entry point.
BMO’s Keith Bachman trimmed his target to $115 from $120 while keeping an Outperform rating. He said results and guidance were mostly in line with expectations, excluding M&A, but called the organic cRPO guide disappointing. Still, he believes ServiceNow remains well‑positioned in AI and sees the valuation as attractive.
Also, Citizens analyst Patrick Walravens cut his target to $157 from $260 but kept a Buy rating. He noted that Q1 results were generally better-than-expected, with revenue up 19% in constant currency and cRPO up 21%. However, gross margin slipped to 79.2% due to the ongoing shift toward lower-margin public cloud hosting.
KeyBanc Analyst Remains Most Bearish
KeyBanc’s Jackson Ader took the most bearish stance, lowering his target to $85 from $115 and maintaining a Sell rating. Ader pointed to deal slippage in the Middle East, lighter-than-usual cRPO upside, and margin pressure from acquisitions as near-term issues dragging the stock. He acknowledged the positive $500 million increase in AI ACV but said it’s being overshadowed by short-term disappointments.
Is NOW stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NOW stock based on 33 Buys, four Holds, and one Sell assigned in the last three months. Further, the average ServiceNow price target of $149.11 per share implies 74.3% upside potential.
