Key Takeaways
- ServiceNow shares have plummeted 34% so far this year, heading toward a seventh consecutive month of losses.
- First quarter 2026 results arrive after today’s closing bell; Wall Street forecasts $0.97 EPS on $3.75B revenue.
- The company’s Now Assist platform doubled its annual contract value year-over-year last quarter, landing 35 deals above $1M.
- TD Cowen anticipates strong results but reduced its price target by 24% to $140.
- Analyst consensus remains bullish: 30 of 35 rate NOW a Buy, with average target of $165.69 suggesting 65%+ potential gains.
ServiceNow enters today’s first quarter 2026 earnings announcement under considerable pressure. Shares have tumbled 34% since January, caught in a sweeping software sector downturn as investors reassess AI’s long-term implications for traditional enterprise platforms.
Results are scheduled for release following today’s market close. Wall Street consensus calls for adjusted earnings of $0.97 per share—representing 20% year-over-year growth after accounting for the December 5-for-1 stock split—alongside revenue of approximately $3.75 billion, which would constitute roughly 21% annual growth.
Meeting these projections would represent another quarter of respectable performance. Whether that suffices in the current environment remains uncertain.
The enterprise software landscape has endured significant turbulence throughout 2026. A “death of SaaS” thesis—suggesting AI-native applications will cannibalize conventional software recurring revenue—has erased nearly $2 trillion in market capitalization from the sector since February’s opening weeks.
ServiceNow finds itself at the epicenter of this discussion. Operating as both a workflow automation provider and enterprise AI platform, the company faces risks from this shift while simultaneously holding potential advantages.
Now Assist Performance Takes Center Stage
While top and bottom line figures matter, investor attention will concentrate on Now Assist, ServiceNow’s generative AI offering integrated within its AI Platform infrastructure.
During the fourth quarter, management disclosed that Now Assist’s annual contract value expanded by more than 100% compared to the prior year period. CEO Bill McDermott highlighted 35 individual agreements surpassing $1 million during Q4 in his previous earnings presentation.
Any deceleration in this growth momentum during today’s announcement would likely pressure shares further. Conversely, stronger-than-expected results could provide the positive catalyst the stock desperately needs.
The equity also approaches a potential seventh straight monthly decline—which would establish its longest consecutive losing period in company history, according to Dow Jones Market Data. Breaking such a sustained downturn presents a significant challenge.
Wall Street Maintains Confidence Despite Lower Price Targets
Notwithstanding the substantial selloff, analyst support remains largely intact. TD Cowen’s Derrick Wood maintained his Buy rating following recent industry conversations last week, projecting “a solid beat and raise.” Though he reduced his price objective by 24% from $185 to $140, his target still implies approximately 40% appreciation from current trading levels.
Truist’s Miller Jump similarly preserved his Buy recommendation while adjusting his target downward from $175 to $125—a 29% reduction—though still indicating around 25% upside potential. Jump observed that numerous enterprise customers continue positioning ServiceNow as a strategic AI implementation partner rather than viewing it as vulnerable to disruption.
He additionally identified vendor consolidation as a possible positive factor. As organizations streamline their software vendor relationships, larger platforms with deep enterprise integration like ServiceNow typically capture greater wallet share.
Overall, 30 of 35 analysts covering the stock maintain Buy ratings, with only four Hold recommendations and a single Sell. The consensus price target stands at $165.69—implying more than 65% upside from current price levels.
The earnings release is scheduled for after today’s closing bell.
