Citizens analyst Patrick Walravens kept a Market Outperform rating on ServiceNow (NYSE:NOW) and reiterated a $260.00 price target on Thursday. That target implies a substantial upside from the company's recent share price of $129.62. ServiceNow shares have been pressured in recent months, trading near a 52-week low of $123.78 after a 34.75% decline over the last six months. InvestingPro analysis included in the commentary indicates ServiceNow appears undervalued relative to its Fair Value.
Walravens' note centered on the company's forward guidance, which topped consensus yet did not signal an inflection in growth metrics, according to the analyst. For the first quarter of fiscal 2026, ServiceNow guided subscription revenue of $3.650 billion to $3.655 billion, exceeding the consensus estimate of $3.575 billion. That range translates to 21.5% year-over-year growth on an as-reported basis and 18.5% to 19% growth in constant currency, compared with 19.5% growth in the fourth quarter.
The company also provided a quarterly outlook for key operating metrics. ServiceNow projected first-quarter cRPO growth of 22.5% (20% in constant currency) versus consensus expectations of 19%, and it expects an operating margin of 31.5% for the quarter.
On a full-year basis, ServiceNow set subscription revenue guidance for fiscal 2026 of $15.530 billion to $15.570 billion, ahead of the consensus forecast of $15.213 billion. That guidance implies 20.5% to 21% growth as reported and 19.5% to 20% growth in constant currency, with roughly 100 basis points of the increase attributed to acquired subscription revenue.
Profitability and cash flow guidance were also included in the fiscal 2026 outlook. ServiceNow's operating margin guidance for the year is 32%, slightly above the consensus of 31.8%. The company projects a free cash flow margin of 36%, compared with consensus expectations of 34.1%.
These forward-looking figures followed the company's fourth-quarter 2025 reported results, which topped analysts' estimates. ServiceNow posted earnings per share of $0.92 versus the expected $0.89 and reported revenue of $3.57 billion against a forecast of $3.53 billion, representing a 3.37% surprise in EPS.
Broker reactions since the results have varied. BMO Capital cut its price target for ServiceNow to $170 from $175 but maintained an Outperform rating, noting that the company's fiscal 2026 subscription revenue guidance was in line with expectations. Jefferies reiterated a Buy rating and kept a $175 price target, citing robust subscription revenue performance. RBC Capital lowered its price target to $185 from $195 while acknowledging a "clean beat" in earnings.
ServiceNow also exceeded its own guidance on certain metrics: currency-adjusted subscription revenue outpaced expectations by roughly 130 basis points, and operating margin beat guidance by about 90 basis points.
Taken together, the reiterated Market Outperform and $260 price target from Citizens sit alongside mixed—but broadly constructive—market responses to ServiceNow's earnings and guidance. The company provided revenue and margin guidance that beat consensus estimates, reported a modest EPS surprise for the quarter, and saw multiple brokers adjust targets while largely retaining positive stances.