Stifel reiterates ServiceNow stock rating despite guidance concerns
Stifel maintained its Buy rating and $160 price target on ServiceNow (NYSE:NOW) despite mixed Q3 results. ServiceNow reported 21% constant currency current remaining performance obligation growth, with AI net new annual contract value up 65% YoY. The company raised its 2026 AI annual contract value target to over $1.7B but issued softer Q4 guidance. Analysts' reactions varied, with some lowering price targets while others see buying opportunities.
How this was made
The 30-second read
Why it matters
Analyst target revisions range from $110 to $180, reflecting divergent views on AI momentum versus guidance softness.
Market read
The fresh earnings and guidance data provide actionable insight for traders evaluating ServiceNow's near‑term price trajectory.
What to watch
The 65% YoY AI contract growth and $1.7B AI ACV target may offset short-term guidance weakness.
Background
ServiceNow reported Q3 revenue of $4.11B and non‑GAAP EPS of $1.00, slightly beating revenue estimates but missing EPS expectations, prompting mixed analyst reactions.
Ticker impact
Stifel reiterated a Buy rating and $160 price target for ServiceNow after its Q3 results and Q4 guidance, noting softer guidance and AI headwinds.
likely downside pressure as investors price in the softer Q4 guidance and AI headwinds
The article provides fresh guidance numbers and analyst target adjustments, which are new information that can affect near-term pricing.
Market effects
Software and cloud services sector may see broader scrutiny on AI-related growth forecasts.
U.S. tech equities could experience modest pullback amid guidance concerns.
Limited to investors tracking U.S. enterprise software and AI exposure.
Counterpoint
AI revenue growth could accelerate faster than guidance suggests, offering a buying opportunity at lower valuations.
Key entities
- AnalystStifel
Maintained Buy rating with $160 price target.
- AnalystMorgan Stanley
Reduced target to $160, citing growth concerns.
