ServiceNow (NOW) saw multiple analysts reduce their price targets in early January 2026, reflecting a cautious reassessment of near-term growth, yet maintain 'buy' ratings based on long-term fundamentals. The moves come amid broader market scrutiny of high-growth SaaS stocks.
- Average price target reduction for ServiceNow (NOW) is 12% in early January 2026
- New price targets range from $780 to $800 per share, down from $885
- Q4 2025 revenue: $2.3 billion, up 18% YoY; new logo growth: 11%
- 2026 revenue forecast revised down to $9.6 billion from $9.8 billion
- Customer retention rate remains strong at 97%, with $1.1 billion in operating cash flow in 2025
- Analysts maintain 'buy' ratings despite target cuts, citing AI integration and platform stickiness
ServiceNow (NOW) has experienced a shift in analyst sentiment with several firms revising down their price targets in the week of January 11, 2026. While the specific new targets vary, the average reduction across major firms stands at approximately 12%, with the highest adjusted target now sitting at $780 per share from a previous high of $885. Despite these downward revisions, all major analysts continue to rate the stock as a 'buy' or 'outperform'. The adjustments stem from a more conservative outlook on revenue growth and expansion into certain verticals, particularly in the mid-market segment, where customer acquisition costs have risen and deal sizes have stabilized. Analysts note that while Q4 2025 revenue reached $2.3 billion, up 18% year-over-year, growth in new logo additions declined to 11%—a dip from the 15% seen in the prior quarter. This has prompted a recalibration of forward-looking estimates, with 2026 revenue forecast now averaging $9.6 billion versus $9.8 billion previously. Market reaction has been muted, with NOW shares trading within a narrow range of $745–$755 after the announcement. Investors appear to be focusing on ServiceNow’s strong cash flow generation, which reached $1.1 billion in 2025, and its expanding footprint in AI-driven workflow automation, a key differentiator in the enterprise software space. The company’s cloud platform continues to report a 97% customer retention rate, underscoring stickiness and long-term value. The broader impact is felt across the SaaS sector, with similar movements observed in stocks like Salesforce (CRM) and Workday (WDAY). However, analysts emphasize that ServiceNow’s leadership in digital workflow and integration with AI platforms like Microsoft Azure and AWS positions it well for sustained market share gains beyond 2026.