ServiceNow (NOW) got a 4% lift on Wednesday after Guggenheim analyst John DiFucci flipped his rating from Neutral to Buy, setting a $125 price target on the stock.
The stock had been trading at $99.28 heading into Wednesday’s session — down roughly 51% over the past year — making that $125 target a meaningful upside call.
DiFucci valued NOW at 7.5x EV/NTM Recurring Revenue, a premium to most SaaS peers, but one Guggenheim says is justified given the company’s profitability and expected double-digit growth.
“We believe current levels present an attractive opportunity for investors to purchase a comfortably profitable stock likely to continue to grow at double digits,” DiFucci wrote.
The upgrade follows a rough stretch. Since Guggenheim moved NOW from Sell to Neutral back in December 2025, the stock dropped 35% — badly trailing the IGV software index, which fell 16%, and the S&P 500, which gained 10% over the same period.
DiFucci flagged that AI monetization is unlikely to show up soon, and that AI-related risks — including talent loss to AI-native startups — are very real. But the firm stopped short of calling AI an existential threat to the business.
Guggenheim also noted ServiceNow’s heavy reliance on M&A, including its Armis acquisition, to fuel growth as something investors should keep an eye on.
Separately, Evercore ISI reiterated its Outperform rating on NOW with a $150 price target as the company heads into its Q2 earnings report.
Evercore said the conversation has shifted from long-term AI strategy to near-term execution following ServiceNow’s recent Financial Analyst Day.
At that event, ServiceNow laid out its AI Control Tower strategy, AI-native packaging, and a subscription revenue target of more than $30 billion by fiscal year 2030 — implying a CAGR of approximately 17.5%.
The company guided Q2 cRPO growth to approximately 19.5% in constant currency. But Evercore noted that figure includes contributions from the Moveworks and Armis acquisitions, putting organic constant-currency growth closer to the low-to-mid 17% range.
Evercore said investors will be watching whether organic cRPO growth stabilizes as pressure from the U.S. federal government sector eases.
The firm set out a clear bar for the Q2 print: constant-currency growth of 20% to 20.5% would be seen as adequate, while anything closer to 21% or above could help ease concerns about organic deceleration.
Bernstein also holds an Outperform rating on NOW, calling it the least expensive mid/large cap software stock on certain financial metrics. The firm sees a favorable setup for the second half of 2026.
Benchmark raised its price target to $130 with a Buy rating, while Oppenheimer reiterated Outperform at $130, citing growth opportunities in the back half of the year.
ServiceNow’s gross profit margins stand at 76.56%, according to InvestingPro data.
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