ServiceNow Seen as Non-Consensus Idea Amid Negative Investor Sentiment, RBC Says

MT Newswires Live01-30

ServiceNow (NOW) remains an attractive non-consensus idea that could benefit from enterprise artificial intelligence adoption and reach an inflection point in 2026, ultimately delivering more than 20% organic constant-currency growth, RBC Capital Markets said.

Against negative investor sentiment and a clean quarterly beat alongside in-line to better calendar year 2026 guidance, the brokerage said in a Wednesday note that it "would be buyers of NOW on weakness."

The year sets up well with accelerating net new annual contract value, an easier federal comparison and enterprise AI momentum that appears to be building.

The investment firm said the company's management addressed key bear arguments effectively and articulated the strategic rationale for the acquisitions of Moveworks, Veza and Armis, with deep integration cited as the long-term objective.

ServiceNow expects Q1 subscription revenue of $3.65 billion to $3.655 billion, implying about 21.5% year-over-year growth. The outlook compares with RBC's prior estimate of $3.559 billion. For full-year 2026, the company guided to subscription revenue of $15.53 billion to $15.57 billion, above RBC's prior forecast of $15.211 billion.

RBC maintained an outperform rating on the stock and lowered its price target to $185 from $195.

Shares of ServiceNow were down nearly 11% in recent Thursday trading.

Price: 115.48, Change: -14.14, Percent Change: -10.91

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