KeyBanc has lowered its price target on ServiceNow (NYSE: NOW) to $115.00 from $155.00 while retaining an Underweight rating on the enterprise software vendor. The move came after the company outlined its 2026 revenue trajectory, and market reaction drove shares lower into the after-hours session.
ServiceNow’s stock is trading near its 52-week low, having declined 34.75% over the past six months, according to InvestingPro data. The KeyBanc revision was prompted by ServiceNow’s guidance for 2026, which projects organic subscription revenue growth of 18.5-19.0% - a pace that KeyBanc analyst Jackson Ader said does not sufficiently address investor concerns. That forecast is a deceleration from ServiceNow’s current revenue growth of 21.05% over the last twelve months.
Following KeyBanc’s announcement, ServiceNow shares fell 6.85% in after-hours trading, the report said. KeyBanc noted that ServiceNow management has taken steps intended to counter negative narratives - including disputing the so-called "Death of SaaS" thesis, addressing worries about seat compression, and highlighting recent M&A activity - but investors appeared to place greater emphasis on the topline growth figures.
ServiceNow also unveiled a new share repurchase authorization, yet that measure did not fully offset the market’s reaction to the company’s growth outlook, according to KeyBanc’s summary. Despite the share price decline, InvestingPro analysis indicates ServiceNow may be undervalued at current levels and shows an analyst consensus at 1.39, which InvestingPro classifies as Strong Buy. Additional research and ProTips are available in the InvestingPro Pro Research Report for ServiceNow.
In other recent company developments, ServiceNow reported a 20% organic constant currency increase in its current remaining performance obligation, topping its 19% guidance. The company’s 2026 outlook was characterized as positive by management, with a midpoint forecast of 18.75% organic constant currency subscription revenue growth that Management said exceeded consensus estimates.
Analyst responses to ServiceNow’s results and guidance have been mixed. BTIG has maintained a Buy rating with a $200 price target. Citizens analyst Patrick Walravens reiterated a Market Outperform rating and a $260 price target. Jefferies reiterated a Buy rating, citing strong subscription revenue performance. By contrast, BMO Capital trimmed its price target to $170, describing the fourth quarter as "solid if unspectacular." JPMorgan adjusted its price target to $195 while maintaining an Overweight rating. Collectively, these assessments reflect differing views among sell-side firms as ServiceNow continues shifting toward a multi-product platform and expanding its workflow management capabilities.
Key takeaways include the market’s sensitivity to subscription revenue growth metrics and a divergence in analyst sentiment despite corporate actions intended to bolster investor confidence. The combination of slowed guidance relative to recent growth rates and a new buyback authorization has produced a nuanced market response rather than a clear positive repricing.