Cantor Fitzgerald has reiterated an Overweight rating on ServiceNow with an unchanged price target of $200.00 following the software company's quarterly earnings release. The firm’s target implies a 62% upside from ServiceNow’s current share price of $114.46, with the stock trading near its 52-week low.
ServiceNow reported constant currency current remaining performance obligation (cRPO) growth of 21%, exceeding the consensus Street estimate of 19%. Subscription revenue for the fourth quarter of 2025 rose 19.5% in constant currency, ahead of the Street’s 18% projection. These results are consistent with the company’s 21.05% revenue increase over the last twelve months and maintain a five-year revenue compound annual growth rate of 26%.
Management attributed the quarterly strength largely to strong renewals and expansions within large, existing customer accounts, although the company noted persistent headwinds in the U.S. Federal sector. Artificial intelligence engagement continued to be a prominent factor driving expansion deals, complemented by traction in newer product areas including Raptor, Fabric, and CPQ.
ServiceNow’s operating profile remains efficient for a major software provider, with gross profit margins reported at 78.05%.
On guidance, ServiceNow gave first-quarter 2026 projections that surpassed Street expectations. The company forecasted constant currency subscription revenue growth, adjusted for Moveworks and transitions related to self-hosted/hosted revenue recognition models, of 19.25% - versus the Street estimate of 18%. For Q1 2026, management also guided cRPO growth in constant currency to 20%, above the Street’s roughly 18.5% expectation.
For calendar year 2026, ServiceNow set a midpoint guidance for constant currency subscription revenue growth of 19.75%, or 18.75% excluding Moveworks. This compares to Street expectations of 18.5%. Company guidance factors in an anticipated headwind of about 0.5% for the year tied to self-hosted/hosted model transitions.
Despite the beat on several metrics and an upbeat fiscal 2026 outlook, the stock declined in after-hours trading following the release. Analyst responses were mixed.
- Bernstein SocGen Group reiterated an Outperform rating.
- DA Davidson maintained a Buy rating.
- TD Cowen described the results as strong but trimmed its price target to $185, noting that ServiceNow’s organic current remaining performance obligations exceeded expectations while remaining slightly below the year-to-date average.
- Piper Sandler reiterated an Overweight rating with a $200 price target, citing solid fourth-quarter results and fiscal 2026 guidance.
- KeyBanc lowered its price target to $115, signaling concern that the projected 18.5-19.0% organic subscription revenue growth for 2026 may not be sufficient to ease market worries.
The combination of outperformance on measured metrics and a range of analyst reactions underlines a split market view on how investors should interpret ServiceNow’s near-term momentum versus longer-term expectations.
Summary takeaways:
- ServiceNow delivered cRPO and subscription revenue growth that exceeded Street estimates for Q4 2025 and provided guidance for Q1 2026 and calendar 2026 that also outperformed consensus on key lines.
- Artificial intelligence adoption and new product areas are cited as important drivers of customer expansions, while the U.S. Federal sector remains a headwind.
- The company continues to report healthy gross margins and sustained multi-year revenue growth rates.