ServiceNow (NYSE:NOW) shares slid roughly 5% in after-hours trading despite the enterprise software company reporting solid fourth-quarter 2025 results and issuing an upbeat preliminary forecast for fiscal year 2026. The stock has been under pressure, falling more than 34% over the last six months and trading at $114.20, well below its 52-week high of $234.08.
Quarterly performance and margins
Bernstein SocGen Group reiterated an Outperform rating on the stock and left its price target at $219.00. In its note, Bernstein highlighted that ServiceNow produced a 1.3% constant currency revenue beat in the fourth quarter of 2025. The firm also pointed to the company’s gross profit margin of 78.05% as evidence of continued operational strength.
ServiceNow reported its largest-ever organic quarter-over-quarter addition to current remaining performance obligations - approximately $1.4 billion - excluding contributions from its Moveworks acquisition. The company characterized this as a record organic cRPO quarter.
Guidance for fiscal 2026
In its initial outlook for fiscal year 2026, ServiceNow projected organic constant currency growth of roughly 18.8% at the midpoint, which the company noted is above the consensus estimate of 18.3%. Management also forecast GAAP revenue growth of about 19.7% for fiscal 2026, ahead of the analyst consensus of 18.8%.
Analyst reactions and divergent views
Several brokerages adjusted their stances or reiterated ratings after the quarterly results and guidance. DA Davidson reiterated a Buy rating and raised its fiscal 2026 estimates, attributing part of the momentum to ServiceNow’s Now Assist and CRM products. TD Cowen kept a Buy rating, noting that current remaining performance obligations slightly surpassed expectations. Piper Sandler reiterated an Overweight rating, flagging that fiscal 2026 guidance was modestly ahead of street expectations.
At the same time, some firms expressed reservation. KeyBanc lowered its price target to $115 and signaled concern that the company’s projected 18.5-19.0% organic subscription revenue growth for 2026 may be insufficient. JPMorgan adjusted its price target to $195 while maintaining an Overweight rating, acknowledging ServiceNow’s leadership in cloud-based IT workflow management and its move into new product areas.
Market implications and context
The mixed set of analyst responses underscores a split reception among investors and sell-side strategists. On one hand, the outperformance versus consensus on revenue and the strong gross margin reinforce ServiceNow’s operational progress. On the other hand, some analysts remain cautious about the pace of subscription growth embedded in the company’s guidance.
Overall, the company’s results and guidance prompted both reaffirmations and recalibrations from major brokerages, leaving investor sentiment mixed as market participants weigh strong margin metrics and record organic cRPO growth against questions about future subscription momentum.