ServiceNow, Inc. (NOW), with a market capitalization of approximately $128.2 billion, is an enterprise software company that provides an AI-powered platform connecting data, workflows, and systems. The Santa Clara, California-based company’s solutions automate and streamline IT, HR, customer service, security, finance, and other business processes, improving productivity and operational efficiency.
Shares of the enterprise software giant have considerably underperformed the broader market over the past year. NOW has declined 32.1% over this period, while the broader S&P 500 Index ($SPX) has rallied 20.1%. On a year-to-date basis, NOW has continued to underperform, plunging 23.2% compared with the index’s 13.1% gain over the same period.
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Narrowing the comparison, NOW has also underperformed the iShares Expanded Tech-Software Sector ETF (IGV), which has declined 6.5% over the past year and 3.5% on a YTD basis.
www.barchart.com On July 22, ServiceNow reported its Q2 FY2026 earnings and its shares fell about 6.5% as investors weighed the company’s outlook. The company’s subscription revenues grew 24.5% year-over-year to $3.88 billion, exceeding the high end of guidance by 150 basis points. Non-GAAP EPS rose 11.1% to $0.90 from the prior-year quarter.
ServiceNow raised its full-year 2026 subscription revenue guidance to $15.76 billion to $15.78 billion, representing 22.5% growth, or 21% in constant currency, while guiding for a full-year non-GAAP operating margin of 31.5% and non-GAAP free cash flow margin of 35%. For the third quarter, the company guided subscription revenue to $3.975 billion to $3.980 billion, representing 20.5% growth, with a non-GAAP operating margin of 31%.
For the current fiscal year ending in December 2026, analysts expect NOW’s diluted EPS to rise 14.3% to $2.24. NOW has surpassed consensus EPS estimates in two of the past four quarters, while missing expectations in the other two.
Among the 45 analysts covering NOW stock, the consensus rating is “Strong Buy.” The rating is based on 37 “Strong Buys,” three “Moderate Buys,” three “Holds,” one “Moderate Sell,” and one “Strong Sell.”
www.barchart.com NOW’s analyst configuration is more bullish than it was two months ago, when the stock had 36 “Strong Buy” recommendations.
On August 12, Wells Fargo analyst Michael Turrin maintained an “Overweight” rating on ServiceNow and raised the price target from $160 to $175.
The mean price target of $143.67 implies a 22.1% upside from NOW’s current share price, while the Street-high target of $248 suggests a potential upside of 110.7%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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