ServiceNow is scheduled to announce its first-quarter financial results on April 22. According to Citi Bank, the company's performance is likely to slightly exceed expectations, as initial signs of consumption improvement have begun to emerge. Citi analyst Tyler Radke has maintained a "Buy" rating for ServiceNow but has reduced the target stock price from $237 to $177. The general analyst consensus expects ServiceNow to report earnings per share of $0.97 and revenue of $3.75 billion.
In a report to clients, Radke noted that first-quarter field checks with partners indicated that most partners performed slightly above expectations. However, some deal delays and weaker demand from the federal government were also observed. Data from CIO surveys suggests that IT budgets are being adjusted, primarily constrained by clear return on investment and governance mechanisms, areas where ServiceNow continues to excel.
A meeting last month with Chief Product Officer Amit Zavery indicated that AI labs are directly adopting workflows managed by ServiceNow, further strengthening the company's competitive advantage. Performance is expected to slightly surpass estimates and continue modestly into fiscal year 2026. While revenue expectations for fiscal 2026 remain unchanged, revenue and profit forecasts for fiscal years 2027-2028 have been lowered by 50 to 200 basis points, as growth potential in the coming years remains dependent on the early stages of AI adoption.
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