Despite a sharp 28% decline in ServiceNow’s stock price over recent weeks, financial analysts continue to express confidence in the company’s long-term prospects, citing resilient revenue growth, strong cloud adoption trends, and a dominant position in digital workflow automation.
- ServiceNow (NOW) stock declined 28% from December 2025 to January 2026
- 18 of 22 analysts maintain 'buy' or 'outperform' ratings
- Q4 2025 revenue reached $2.48 billion, up 21% YoY
- Subscription revenue grew 22% year-over-year
- Consensus price target implies 25% upside from current levels
- Forward P/E ratio at 52x, below its 5-year average of 60x
ServiceNow (NOW) has experienced a notable 28% drop in its share price since early December 2025, driven by broader market corrections and investor concerns over elevated valuation multiples. However, analyst sentiment remains overwhelmingly positive, with 18 out of 22 major brokerage firms maintaining 'buy' or 'outperform' ratings on the stock. The consensus price target stands at $820, implying a 25% upside from current levels as of January 17, 2026. The underlying fundamentals continue to support this optimism. ServiceNow reported fourth-quarter 2025 revenue of $2.48 billion, representing a 21% year-over-year increase, with subscription revenue growing 22%. The company added 1,250 new customers during the quarter, including several large enterprises across financial services and healthcare. Its platform continues to capture market share in the enterprise workflow automation space, where it holds a leading position with over 7,500 active customers worldwide. Market dynamics suggest that the recent price decline may have created a buying opportunity. NOW’s forward price-to-earnings ratio has dipped to 52x, below its 5-year average of 60x, while its free cash flow margin remains above 28%. Institutional ownership has also remained stable, with 82% of shares held by long-term investors. Analysts argue that the stock’s pullback reflects short-term sentiment rather than fundamental deterioration. The divergence between the stock’s performance and analyst outlook could lead to increased trading activity, particularly as institutional investors reassess valuations. The move may also attract momentum-driven buyers seeking growth exposure in the enterprise cloud software sector, where ServiceNow is considered a core holding. Key competitors include Salesforce (CRM), Workday (WDAY), and SAP (SAP), but ServiceNow’s differentiation in workflow orchestration remains a strategic advantage.