TLDR
- ServiceNow (NOW) stock trades at $850-860, down 17% from January 2025 high of $1,198, now valued at 8.5x projected 2027 revenue
- Cantor Fitzgerald maintains Overweight rating with $240 price target, expects 2027 growth to exceed 18% consensus driven by seat expansion and federal strength
- Q3 2025 revenue hit $3.41 billion with 22% year-over-year growth, EPS reached $0.96 beating analyst estimates
- AI platform targets $1 billion annual contract value by end of 2026 as company builds enhanced governance and security features
- Consensus analyst price targets average $1,140 with range from $734 to $1,300 implying upside from current levels
ServiceNow (NOW) stock has pulled back from recent highs. Shares now trade around $850-860, down 17% over the past year from the January 2025 peak of $1,198.
The decline has created what some analysts view as an opportunity. Cantor Fitzgerald reiterated an Overweight rating on January 5 with a $240 price target.
The stock currently trades at 8.5x projected 2027 revenue. This marks a three-year valuation low for ServiceNow (NOW) stock.
Revenue Growth Continues Despite Stock Pressure
Third-quarter results showed strength. ServiceNow (NOW) stock delivered revenue of $3.41 billion, up 22% year-over-year. Earnings per share reached $0.96 compared to $0.74 in the prior year.
Both metrics beat consensus estimates. Subscription revenue hit $3.3 billion, growing 20.5% in constant currency. Operating margin expanded to 33.5%.
Current-quarter revenue estimates sit at $3.52 billion. That represents 19% year-over-year growth. Full-year 2026 projections call for EPS growth exceeding 20%.
Cantor Fitzgerald sees multiple growth drivers. Seat expansion continues as organizations deploy ServiceNow (NOW) stock across more departments. Federal sector business has exceeded expectations with government agencies modernizing workflows.
AI Platform and M&A Activity
The AI narrative is gaining traction. Management targets $1 billion in annual contract value from the AI platform by end of 2026. The company is enhancing its AI data stack with improved governance and security.
Mergers and acquisitions activity is increasing. Cantor notes this expands ServiceNow’s total addressable market rather than simply buying growth.
Analysts project 2027 revenue growth at 18% consensus. Cantor believes this estimate could prove conservative based on current momentum from seat growth, federal business, AI adoption, and M&A activity.
Consensus analyst price targets average around $1,140. Individual targets range from $734 to $1,300. These figures suggest upside potential from current ServiceNow (NOW) stock levels.
The company completed a 5-for-1 stock split in late 2025. The move followed a quarter that beat estimates and included raised guidance. The board aimed to improve retail investor access.
Management acknowledges macro and IT-spending risks remain. However, the combination of platform scaling and AI-driven upsell continues to drive growth projections. Cantor Fitzgerald views recent acquisitions as strategic moves to expand market opportunities, aligning with themes from the Knowledge 2025 conference.
