Key Takeaways
- Guggenheim shifted its ServiceNow rating from Neutral to Buy, establishing a $125 price objective that fueled a 4% Wednesday rally
- Shares had plummeted approximately 35% following Guggenheim’s prior upgrade from Sell to Neutral in December 2025
- Evercore ISI reaffirmed its Outperform stance with a $150 target as Q2 earnings approach
- Management projects Q2 current remaining performance obligations (cRPO) expansion of roughly 19.5% on a constant currency basis
- During its Financial Analyst Day, ServiceNow mapped out a trajectory toward exceeding $30 billion in subscription revenue by FY2030
ServiceNow (NOW) shares climbed 4% during Wednesday trading after Guggenheim’s John DiFucci elevated his stance from Neutral to Buy, assigning a $125 valuation to the enterprise software provider.
Trading at $99.28 before Wednesday’s session opened, the stock has declined approximately 51% over the trailing twelve months — positioning DiFucci’s $125 price objective as a substantial upside opportunity.
DiFucci’s valuation model places NOW at 7.5 times enterprise value to next-twelve-month recurring revenue, representing a premium versus most Software-as-a-Service competitors. However, Guggenheim contends this multiple is warranted based on the firm’s profitability profile and anticipated double-digit expansion rates.
“Current valuation levels represent a compelling entry point for investors seeking exposure to a solidly profitable company positioned for sustained double-digit growth,” DiFucci stated in his research note.
The rating adjustment comes after a challenging period for shareholders. Following Guggenheim’s shift of NOW from Sell to Neutral in December 2025, shares tumbled 35% — significantly underperforming the IGV software sector index (down 16%) and lagging the S&P 500 (up 10%) during the identical timeframe.
DiFucci acknowledged that artificial intelligence monetization remains distant, while AI-related headwinds — particularly talent attrition to AI-first competitors — pose legitimate concerns. Nevertheless, the analyst refrained from characterizing AI as a terminal risk to ServiceNow’s core business model.
Guggenheim additionally highlighted the company’s substantial dependence on mergers and acquisitions, including the Armis transaction, as a growth engine that warrants ongoing investor scrutiny.
Evercore Reaffirms $150 Price Objective Before Q2 Report
Meanwhile, Evercore ISI maintained its Outperform designation on NOW with a $150 valuation as the enterprise approaches its second-quarter financial disclosure.
Evercore observed that analyst discussions have pivoted from extended-term AI strategy toward immediate-term operational performance following ServiceNow’s latest Financial Analyst Day presentation.
During that investor event, ServiceNow unveiled its AI Control Tower framework, AI-native product bundling approach, and a subscription revenue objective surpassing $30 billion by fiscal 2030 — implying a compound annual growth rate of roughly 17.5%.
Management forecasted Q2 cRPO expansion of approximately 19.5% in constant currency terms. Evercore emphasized, however, that this metric incorporates the Moveworks and Armis deals, placing organic constant-currency acceleration closer to the low-to-mid 17% band.
Evercore indicated that market participants will scrutinize whether organic cRPO momentum stabilizes as headwinds from the U.S. federal government segment begin to subside.
Analyst Expectations for Upcoming Earnings
The investment bank established explicit benchmarks for the Q2 release: constant-currency expansion between 20% and 20.5% would be viewed as satisfactory, while results approaching 21% or higher could alleviate worries regarding organic deceleration.
Bernstein likewise maintains an Outperform recommendation on NOW, characterizing it as the most attractively valued mid-to-large capitalization software stock across select financial metrics. The firm anticipates favorable conditions during the latter half of 2026.
Benchmark elevated its price target to $130 with a Buy rating, while Oppenheimer reaffirmed Outperform at $130, highlighting expansion opportunities in the year’s second half.
According to InvestingPro analytics, ServiceNow’s gross profit margins currently register at 76.56%.
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