Jefferies has reiterated a Buy recommendation on ServiceNow (NYSE: NOW), assigning a $175.00 price target while highlighting the company’s resilient subscription revenue trajectory and strong profitability metrics.
The shares are trading at $129.62 and sit close to a 52-week low of $123.78. Despite that pricing, ServiceNow continues to deliver high gross profit margins, recorded at 78.05%.
Jefferies noted that the company outperformed its own guidance on currency-adjusted subscription revenue by roughly 130 basis points and exceeded guidance on operating margin by about 90 basis points. The firm also flagged an approximately 100 basis point organic, currency-adjusted beat in current remaining performance obligations (cRPO) - a result Jefferies described as notable given ServiceNow’s scale and the presence of early renewals in the third quarter.
For fiscal 2026, ServiceNow provided an initial organic, currency-adjusted growth outlook in the range of 18.5% to 19%. Jefferies characterized that projection as "a solid starting point." The research house also emphasized that ServiceNow achieved over 20% organic growth in 2025 and has a clear route to approach roughly 20% organic growth again in 2026 while pursuing margin expansion.
ServiceNow’s reported fourth-quarter 2025 results beat analyst expectations. The company posted earnings per share of $0.92 versus an anticipated $0.89, and revenue of $3.57 billion compared with estimates of $3.53 billion.
In related analyst moves, RBC Capital reduced its price target on ServiceNow to $185 from $195 but maintained an Outperform rating. RBC analyst Matthew Hedberg labeled the results a "clean beat" and referenced the company’s initial calendar-year 2026 organic outlook.
The mixed signals come as broader investor sentiment toward the stock has turned negative, even as analysts emphasize solid underlying growth and margin trends.
Context and market implications
ServiceNow’s quarter illustrates a combination of robust subscription momentum and high gross margins that underpin analyst confidence. Still, the share price trading near its 52-week low reflects market skepticism despite the beat on revenue and EPS.
Investors and market participants tracking enterprise software, cloud vendors, and broader technology equities will likely weigh the company’s growth outlook and margin trajectory against the current negative investor sentiment.