ServiceNow Inc. shares fell roughly 5% in after-hours trading even after DA Davidson reaffirmed its Buy rating and a $220.00 price target for the cloud software provider. The stock was trading at $115.47, a level far beneath its 52-week high of $234.08, and is flagged as undervalued in InvestingPro analysis.
DA Davidson analyst Gil Luria characterized the company’s results as "a strong close to FY25," pointing to momentum behind the vendor’s Now Assist and CRM offerings. Following ServiceNow’s quarterly report, DA Davidson raised its fiscal 2026 estimates, reflecting the firm’s interpretation of the company’s forward outlook.
ServiceNow reported 21.05% revenue growth, with revenue reaching $12.67 billion over the last twelve months. The company also continues to demonstrate strong profitability, with gross profit margins of 78.05%.
However, the stock decline in after-hours trading appears tied to the market’s reaction to ServiceNow’s forward guidance. While the company’s initial growth outlook for the coming fiscal year was described as better than expected in some respects, the organic-growth guidance did not meet investors’ hopes, and that shortfall contributed to selling pressure after the results were released. Management reiterated its organic growth targets during the earnings presentation, maintaining confidence in the company’s trajectory.
DA Davidson continued to emphasize ServiceNow’s positioning as "a market leading AI innovator and share gainer in CRM," a view that underpins its maintained Buy rating and $220 price target. The stock has fallen 34.75% over the past six months and is trading at a price-to-earnings ratio of 78.61, according to the figures reported.
Multiple brokerages adjusted their views and price targets following the quarterly release, underscoring the range of analyst perspectives on ServiceNow’s near-term growth profile.
- TD Cowen lowered its price target to $185 from $200 but kept a Buy rating, citing strong quarterly results and noting that organic current remaining performance obligations exceeded expectations.
- Piper Sandler reiterated an Overweight rating with a $200 price target, describing the fourth-quarter results and fiscal 2026 guidance as solid and slightly ahead of expectations.
- KeyBanc sharply reduced its price target to $115 from $155, expressing concerns that the company’s projected organic subscription revenue growth for 2026 would not sufficiently allay market worries.
- JPMorgan trimmed its price target to $195 from $215 while maintaining an Overweight rating, recognizing ServiceNow’s leadership in cloud-based IT workflow management and noting its expansion into adjacent areas.
- BTIG maintained a Buy rating and a $200 price target, highlighting the company’s strong year-end performance and a favorable outlook for 2026.
The company reported 20% growth in organic constant currency current remaining performance obligations, a metric that surpassed its own guidance. For fiscal 2026, ServiceNow projected organic constant currency subscription revenue growth of 18.75%, a figure that the company indicated exceeds consensus estimates.
Taken together, the post-earnings analyst activity shows a mix of bullish and cautious positioning: several firms retained Buy or Overweight assessments while adjusting price targets to reflect differing interpretations of the company’s guidance and growth trajectory. The divergence in analyst targets and the market’s sensitivity to organic growth assumptions are central to understanding the stock’s immediate volatility.
Investors looking for deeper analysis can consult InvestingPro’s detailed Research Report for additional context and valuation scenarios on the company.