TD Cowen has adjusted its valuation stance on ServiceNow, lowering the price target to $185.00 from $200.00 but keeping a Buy rating on the enterprise software company. The new target still implies a material upside relative to ServiceNow’s most recent share price of $114.74, which has declined by roughly 43% over the past year according to InvestingPro data.
The change in target followed ServiceNow’s latest quarterly report, which TD Cowen analyst Derrick Wood described as "strong." The firm pointed out that ServiceNow’s organic current remaining performance obligations, or cRPO, came in 1% ahead of Street expectations. That outperformance was smaller than the roughly 2% average beat the firm had observed year-to-date.
TD Cowen’s note emphasized several core metrics behind its continued positive stance. ServiceNow is operating with high profitability, reporting 78% gross profit margins, and it has produced 21% revenue growth over the prior twelve months. The firm also observed that the company benefited less from early renewals in the quarter than it has in some previous periods, but nevertheless described fourth-quarter results as "solid execution."
On guidance, ServiceNow’s fiscal year 2026 organic outlook landed about 1% above Street consensus, and the company signaled expectations for acceleration in net new annual contract value (NNACV) growth in 2026. TD Cowen additionally flagged ongoing momentum around artificial intelligence initiatives and highlighted the strategic role of the Armis asset in helping drive faster adoption.
Despite these favorable fundamentals, TD Cowen cautioned that ServiceNow is "still fighting a tough narrative in software," a nod to investor sentiment that has pressured the shares even as core business metrics remain robust.
Analyst reactions to ServiceNow’s quarter and 2026 guidance varied across the sell-side:
- Piper Sandler reiterated an Overweight rating and retained a $200 price target, pointing to the 2026 organic outlook that slightly outpaced street expectations.
- KeyBanc lowered its price target to $115 and kept an Underweight rating, citing concerns tied to the projected 18.5-19.0% organic subscription revenue growth for 2026.
- JPMorgan trimmed its target to $195 while maintaining an Overweight rating, noting ServiceNow’s early-stage transformation into a multi-product platform.
- BTIG maintained a Buy rating with a $200 target, praising the company’s strong year-end performance and a constructive 2026 outlook.
- Citizens analyst Patrick Walravens reiterated a Market Outperform rating with a $260 price target, observing that the company’s guidance exceeded expectations but did not suggest an acceleration in growth metrics.
ServiceNow also disclosed specific growth figures that underpinned those analyst conclusions. The company reported 20% organic constant currency cRPO growth, ahead of its guidance of 19%, and provided a first-quarter 2026 subscription revenue forecast in the range of $3.650 billion to $3.655 billion, above the consensus estimate of $3.575 billion.
Taken together, the results portray a business with strong margins and steady revenue expansion, positive near-term guidance, and apparent momentum in AI-related initiatives and product expansion. At the same time, investor perception and differing interpretations of the 2026 subscription growth outlook have produced a wide spread of price targets and ratings among equity analysts.
What to watch next
- Execution against the expected acceleration in NNACV in 2026 and how that translates into subscription revenue growth.
- Progress integrating and commercializing the Armis asset to drive faster adoption in relevant customer segments.
- Market reaction to evolving investor sentiment around software narratives versus the company’s underlying financial performance.