ServiceNow (NYSE:NOW) Shares Down 26.8% After Earnings Miss

ServiceNow, Inc. (NYSE:NOW)’s stock price fell 26.8% on Thursday after the company announced weaker than expected quarterly earnings. The company traded as low as $108.68 and last traded at $109.8290. 75,432,001 shares changed hands during mid-day trading, an increase of 249% from the average session volume of 21,594,254 shares. The stock had previously closed at $150.13.

The information technology services provider reported $1.00 earnings per share for the quarter, missing analysts’ consensus estimates of $1.02 by ($0.02). The company had revenue of $4.11 billion for the quarter, compared to the consensus estimate of $4.09 billion. ServiceNow had a net margin of 11.34% and a return on equity of 16.45%. ServiceNow’s revenue for the quarter was up 20.5% compared to the same quarter last year. During the same period in the previous year, the business earned $4.82 EPS.

ServiceNow News Roundup

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow raised its 2026 artificial-intelligence contract target to $1.7 billion, while subscription revenue increased 20.5% year over year to $3.99 billion. The company also expanded its enterprise AI partnership with OpenAI, supporting AI agents, cybersecurity and governed workflows. ServiceNow: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: New commercial activity provided longer-term support, including a five-year HPE agreement to use ServiceNow for AI-powered support services and the launch of a Control Tower Alliance focused on enterprise AI adoption and governance. HPE selects ServiceNow to transform support services
• Positive Sentiment: Several analysts maintained bullish views after the selloff. Piper Sandler reaffirmed an overweight rating with a $175 target, while Oppenheimer maintained outperform with a $165 target. TD Cowen retained a buy rating despite lowering its target to $160. Piper Sandler ServiceNow rating
• Neutral Sentiment: Third-quarter revenue reached $4.11 billion, ahead of the $4.09 billion consensus, but adjusted EPS was $1.00 versus expectations of $1.02. Revenue growth remained strong, although profitability was pressured by acquisition-related costs. ServiceNow third-quarter earnings report
• Negative Sentiment: The main concern was guidance: fourth-quarter contracted backlog growth is expected to slow to 18.5%, below the 21.5% revenue-growth forecast. Because backlog is an indicator of future subscription revenue, investors viewed the deceleration as evidence of softer demand and greater AI-related disruption risk. ServiceNow guides to slower backlog growth
• Negative Sentiment: Analysts also lowered targets, including UBS to $140, BTIG Research to $150 and Wells Fargo to $175. Concerns about ServiceNow’s $7.52 billion debt load and rising interest costs added pressure to the stock’s valuation and financial-flexibility outlook. ServiceNow debt and interest costs

Wall Street Analysts Forecast Growth

Several equities analysts recently weighed in on NOW shares. JPMorgan Chase & Co. increased their price target on shares of ServiceNow from $150.00 to $160.00 and gave the stock an “overweight” rating in a report on Thursday. Guggenheim reaffirmed a “buy” rating and issued a $175.00 price objective (up from $125.00) on shares of ServiceNow in a report on Friday, October 23rd. Piper Sandler reiterated an “overweight” rating and issued a $175.00 price objective on shares of ServiceNow in a research note on Thursday. Stifel Nicolaus set a $160.00 target price on shares of ServiceNow and gave the stock a “buy” rating in a report on Tuesday, October 6th. Finally, The Goldman Sachs Group reissued a “buy” rating on shares of ServiceNow in a report on Monday, August 3rd. One research analyst has rated the stock with a Strong Buy rating, thirty-six have given a Buy rating, three have assigned a Hold rating and three have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $154.50.

Insider Buying and Selling

In other news, insider Jacqueline P. Canney sold 7,847 shares of the business’s stock in a transaction dated Friday, August 28th. The shares were sold at an average price of $138.00, for a total transaction of $1,082,886.00. Following the completion of the sale, the insider owned 30,042 shares of the company’s stock, valued at $4,145,796. The trade was a 20.71% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Paul Chamberlain sold 2,700 shares of ServiceNow stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $135.50, for a total value of $365,850.00. Following the completion of the sale, the director directly owned 43,990 shares in the company, valued at $5,960,645. This represents a 5.78% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 14,081 shares of company stock valued at $1,937,904. 0.34% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. BlackRock Inc. acquired a new stake in ServiceNow during the second quarter worth about $9,536,615,000. State Street Corp boosted its stake in ServiceNow by 2.0% during the second quarter. State Street Corp now owns 49,038,218 shares of the information technology services provider’s stock worth $4,868,514,000 after buying an additional 979,726 shares during the period. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its stake in shares of ServiceNow by 16.6% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 16,638,071 shares of the information technology services provider’s stock valued at $1,651,828,000 after acquiring an additional 2,362,606 shares during the period. Amundi increased its holdings in ServiceNow by 60.9% in the 1st quarter. Amundi now owns 11,479,098 shares of the information technology services provider’s stock valued at $1,200,140,000 after purchasing an additional 4,346,722 shares during the last quarter. Finally, Bank of New York Mellon Corp boosted its position in shares of ServiceNow by 6.5% during the first quarter. Bank of New York Mellon Corp now owns 8,526,931 shares of the information technology services provider’s stock worth $891,491,000 after buying an additional 518,263 shares during the period. 87.18% of the stock is owned by hedge funds and other institutional investors.

ServiceNow Price Performance

The company has a debt-to-equity ratio of 0.43, a current ratio of 0.70 and a quick ratio of 0.70. The firm has a market capitalization of $113.56 billion, a price-to-earnings ratio of 68.64, a PEG ratio of 2.92 and a beta of 0.99. The stock has a 50 day moving average price of $139.55 and a two-hundred day moving average price of $115.79.

ServiceNow Company Profile

ServiceNow, Inc provides cloud-based software designed to help organizations digitize, automate and manage enterprise workflows. Its Now Platform connects people, processes and systems across departments, enabling customers to manage work through a centralized technology environment.

The company’s products and services address a range of business needs, including information technology service management, IT operations management, customer service management, human resources service delivery, security operations, risk and compliance, and application development.