Key Highlights
- Guggenheim shifted its stance on ServiceNow from Neutral to Buy, establishing a $125 price objective that propelled shares up 4% during Wednesday trading
- The company’s shares have plummeted approximately 35% since Guggenheim’s last rating change from Sell to Neutral in December 2025
- Evercore ISI continues backing the stock with an Outperform designation and $150 price objective as second-quarter results loom
- Management projects Q2 current remaining performance obligations (cRPO) expansion of roughly 19.5% when adjusted for currency fluctuations
- During its Financial Analyst Day, ServiceNow revealed plans to exceed $30 billion in subscription revenues by the 2030 fiscal year
ServiceNow (NOW) experienced a 4% surge Wednesday following Guggenheim analyst John DiFucci’s decision to elevate the stock from Neutral to Buy status, accompanied by a $125 price objective.
Shares were changing hands at $99.28 before Wednesday’s trading began — representing a steep 51% decline from twelve months prior — positioning that $125 target as a substantial upside projection.
DiFucci assigned NOW a valuation multiple of 7.5x EV/NTM Recurring Revenue, exceeding most comparable SaaS companies, though Guggenheim argues this premium reflects the firm’s profitability profile and anticipated double-digit expansion trajectory.
“We see the present valuation levels as an appealing entry point for investors seeking a solidly profitable business poised for continued double-digit expansion,” DiFucci stated.
The rating enhancement arrives after a challenging period. Following Guggenheim’s shift of NOW from Sell to Neutral in December 2025, shares tumbled 35% — significantly underperforming the IGV software benchmark’s 16% decline and the S&P 500’s 10% advance during the identical timeframe.
DiFucci acknowledged that meaningful AI revenue generation remains distant, while AI-driven challenges — particularly talent migration toward AI-focused ventures — pose genuine concerns. However, the firm refrained from characterizing AI as a fundamental threat to operations.
Guggenheim additionally highlighted ServiceNow’s substantial dependence on acquisitions, including the Armis transaction, to drive expansion as a factor warranting continued investor scrutiny.
Evercore Maintains $150 Projection Before Q2 Results
In a separate move, Evercore ISI reaffirmed its Outperform stance on NOW alongside a $150 price projection as the enterprise software provider prepares to unveil its Q2 financial performance.
Evercore observed that market focus has transitioned from extended-term AI strategy toward immediate operational delivery following ServiceNow’s latest Financial Analyst Day presentation.
During that gathering, ServiceNow unveiled its AI Control Tower framework, AI-native product bundling, and subscription revenue ambitions surpassing $30 billion by fiscal 2030 — suggesting an approximate 17.5% compound annual growth rate.
Management forecasted Q2 cRPO growth at approximately 19.5% on a constant-currency basis. Yet Evercore emphasized this metric incorporates impact from the Moveworks and Armis deals, placing organic constant-currency expansion nearer to the low-to-mid 17% range.
Evercore indicated market participants will monitor whether organic cRPO growth finds stability as headwinds from the U.S. federal government segment diminish.
Analyst Expectations for Upcoming Results
The investment firm established explicit benchmarks for the Q2 announcement: constant-currency growth between 20% and 20.5% would satisfy baseline expectations, whereas figures approaching 21% or higher could alleviate worries regarding organic deceleration.
Bernstein similarly maintains an Outperform assessment on NOW, designating it as the most attractively valued mid/large cap software stock based on select financial measurements. The firm anticipates favorable conditions throughout the latter half of 2026.
Benchmark elevated its price objective to $130 with a Buy recommendation, while Oppenheimer sustained its Outperform rating at $130, emphasizing expansion prospects in the year’s second half.
ServiceNow reports gross profit margins of 76.56%, based on InvestingPro intelligence.
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