RBC Capital has reduced its price target on ServiceNow Inc. to $185.00 from $195.00, while retaining an Outperform rating on the shares. The refreshed target is substantially higher than ServiceNow’s current market price of $129.62, with the stock trading not far above its 52-week low of $123.78.
The move to lower the target came even as RBC’s analyst Matthew Hedberg characterized the company’s most recent reporting as a "clean beat" and noted an initial CY/26 organic outlook. Those operational signals, RBC says, directly addressed several bearish arguments investors had been making about the company.
Despite the favorable reception to the operational update, investor sentiment has been weak: the stock has fallen 34.75% over the past six months. RBC flagged that market sentiment should improve over time now that some of the short-case points have been tackled publicly.
The firm described ServiceNow as an "attractive non-consensus idea" with exposure to enterprise AI adoption, which RBC believes could hit an inflection point in 2026. That secular opportunity underpins RBC’s continued conviction even as the firm trimmed its absolute valuation target.
RBC attributed the price-target reduction principally to peer multiple compression. The adjustment in target reflects a lower multiple environment among comparable firms rather than a change in RBC’s underlying growth expectations. The firm continues to expect ServiceNow could deliver in excess of 20% currency-adjusted organic growth.
On the fundamentals, ServiceNow reported fourth-quarter 2025 results that exceeded analyst estimates. The company posted earnings per share of $0.92 versus a forecasted $0.89, a 3.37% surprise, and revenue of $3.57 billion versus the $3.53 billion consensus. The earnings call did not include any announcements related to mergers or acquisitions.
RBC’s combination of an earnings beat, a healthy organic-growth outlook, and a maintained Outperform rating highlights a tension between operational progress and valuation pressure in the market. The firm noted that its price-target cut stems from a compressed peer multiple landscape rather than a downgrade of ServiceNow’s growth trajectory.
There have been no recent analyst upgrades or downgrades reported for ServiceNow, according to the information available alongside these developments. Investors and market observers now have the company’s most recent earnings and guidance to weigh against broader sector valuation dynamics.