ServiceNow Exceeds Q4 Estimates but Shares Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7h ago
0mins
Source: CNBC
- Earnings Beat: ServiceNow reported adjusted earnings per share of 92 cents for Q4, surpassing the expected 88 cents, with revenue of $3.57 billion reflecting a 20.5% year-over-year growth, underscoring the company's robust performance in the software sector.
- Share Buyback Initiative: The board approved an additional $5 billion for share buybacks aimed at enhancing shareholder value, despite a more than 6% drop in stock price following the earnings announcement.
- Acquisition Strategy: The acquisition of AI company Moveworks is expected to contribute 100 basis points to subscription revenue growth for FY 2026 and Q1, indicating ServiceNow's strategic push into the AI domain.
- Subscription Revenue Growth: Q4 subscription revenues reached $3.47 billion, a 21% increase from the previous year, exceeding the market expectation of $3.42 billion, demonstrating the company's commitment to investing in AI and security capabilities.
Analyst Views on NOW
Wall Street analysts forecast NOW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NOW is 222.81 USD with a low forecast of 172.00 USD and a high forecast of 263.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
32 Analyst Rating
30 Buy
2 Hold
0 Sell
Strong Buy
Current: 131.800
Low
172.00
Averages
222.81
High
263.00
Current: 131.800
Low
172.00
Averages
222.81
High
263.00
About NOW
ServiceNow, Inc. provides an artificial intelligence (AI) platform for business transformation. The Company’s AI platform connects people, processes, data, and devices to increase productivity and maximize business outcomes. Its intelligent platform, the Now Platform, is a cloud-based solution that helps enterprises and organizations across public and private sectors digitize workflows. The workflow applications built on the Now Platform are organized into four primary areas: Technology, CRM and Industry, Core Business and Creator. Its products include IT Service Management, IT Operations Management, HR Service Delivery, ServiceNow AI Agents, AI Experience, Build Agent, ServiceNow AI Control Tower, AI Agent Fabric, RaptorDB, Workflow Data Fabric, Workplace Service Delivery, ServiceNow Platform Encryption, Telecommunications Service Operations Management, and others. The Company also offers identity security, helping organizations secure access across the enterprise.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
