ServiceNow (NOW) has seen its shares retreat from a prominent peak earlier this year, creating a conversation among investors and analysts alike about whether this pullback signifies a buying opportunity. Currently trading in the range of $850 to $860, this notable decline marks a decrease of approximately 17% from January 2025’s high of $1,198.
On January 5, 2026, Cantor Fitzgerald’s Thomas Blakey reiterated an Overweight rating for ServiceNow’s stock with a price target set at $240. This outlook is based on the current valuation, which stands at an intriguing 8.5 times projected revenue for 2027, reflecting a three-year low for the stock.
The financial results for Q3 are telling of the company’s ongoing strength. ServiceNow announced revenue of $3.41 billion for the quarter, representing a robust 22% year-over-year growth. Earnings per share also came in above expectations at $0.96, compared to $0.74 the previous year. Subscription revenue, which is key for the company’s profitability, surged to $3.3 billion, a 20.5% increase in constant currency, alongside a non-GAAP operating margin expansion to 33.5%.
Exploring Growth Catalysts
Analysts from Cantor Fitzgerald are bullish on the various growth drivers emerging within ServiceNow. They cite the expansion of seats as a pivotal factor, as numerous organizations are optimizing their deployments across different departments. Furthermore, the federal sector is performing exceptionally well, contributing to results that surpass initial forecasts as government agencies modernize their operations.
The AI landscape remains a major focus for the company. Management has ambitious plans for the ServiceNow AI platform, projecting it will achieve $1 billion in annual contract value by the end of 2026. This includes building out enhanced governance and security features within its AI data stack to cater to rising market demands.
Additionally, a surge in mergers and acquisitions activity indicates a strategic effort not solely focused on buying growth but on expanding the overall market potential for ServiceNow’s services and products.
Looking Forward to 2027
With consensus estimates indicating an 18% revenue growth for 2027, analysts at Cantor Fitzgerald believe there’s a chance for this estimate to be conservative, based on current trends driven by seat expansions, AI adoption, and federal business momentum. Current-quarter revenue projections are expected to hit around $3.52 billion, reflecting a solid 19% increase year-over-year.
Looking ahead to 2026, full-year projections suggest earnings per share growth may exceed 20%, highlighting the scalability of the platform and the potential for upsell opportunities driven by AI advancements. However, the management team remains cautious of possible macroeconomic and IT spending risks that could emerge.
Current analyst price targets for ServiceNow display a bullish sentiment, clustering around $1,140, with a range between $734 and $1,300. This suggests that, if forecasts hold true, significant upside remains from the current trading levels.
Furthermore, in a marked move to enhance retail investor access, the company executed a 5-for-1 stock split in late 2025 following a strong quarter that beat expectations and raised guidance.
Cantor Fitzgerald’s ongoing view stresses that ServiceNow’s recent acquisitions broaden market opportunities. Their strategic alignment with themes discussed at the Knowledge 2025 conference signals an optimistic outlook for the company, even as shares currently reflect a market cap that accounts for both near-term challenges and long-term growth prospects.
