Key Stats for ServiceNow Stock
- Pre-market price change for ServiceNow stock: -13%
- $NOW Share Price as of Apr. 22: $103
- 52-Week High: $211
- $NOW Stock Price Target: $165
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What Happened?
ServiceNow (NOW) stock dropped sharply after the company posted Q1 2026 results that narrowly beat estimates but left investors wanting more.
- Revenue came in at $3.77 billion, just ahead of the $3.75 billion expected.
- Earnings per share were $0.97 adjusted, in line with estimates.
The problem?
- Subscription revenue growth took a hit.
- The company said the ongoing conflict in the Middle East delayed the closing of several large on-premises deals, creating a roughly 75-basis-point drag on subscription revenue.
- That number came in at $3.67 billion — technically a beat, but not by much.
CEO Bill McDermott was quick to push back against the negativity, noting that the company raised its full-year subscription revenue forecast to $15.74 billion to $15.78 billion.
That’s up meaningfully from last quarter’s guide of $15.53 to $15.57 billion.
CFO Gina Mastantuono told CNBC that the updated guidance already incorporates some conservatism around Middle East deal timing.
There were genuine bright spots.
- ServiceNow bought back roughly 20 million shares in the quarter — more than double the total for all of 2025.
- The company also completed its $7.75 billion acquisition of cybersecurity firm Armis ahead of schedule.
- Its AI product line is reportedly on track to exceed the $1 billion revenue target for 2026, with McDermott hinting on the call that $1.5 billion may be more realistic.
See analysts’ growth forecasts and price targets for ServiceNow stock (It’s free) >>>
What the Market Is Telling Us About ServiceNow Stock
ServiceNow stock was already down about 30% year-to-date heading into earnings. A narrow beat with a Middle East headwind wasn’t enough to turn sentiment around.
Investors seem frustrated by the pace of AI monetization. ServiceNow stock has been positioned as an “AI control tower” play, but the numbers aren’t yet reflecting the explosive growth some had hoped for.
Management kept pointing investors to their Financial Analyst Day on May 4 for the bigger picture, which likely added to the uncertainty.
The fundamentals aren’t broken. But for ServiceNow stock to recover, the company will need to show that its AI bets are paying off in the numbers — not just in the talking points.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
