ServiceNow (NOW) Stock Forecast & Price Target

ServiceNow Inc. has demonstrated strong growth metrics, with new logo NNACV in EMEA and Japan increasing nearly 30% year-over-year, while its Now Assist ACV surpassed $600 million in the fourth quarter of CY25. The company has diversified its offerings beyond IT service management, resulting in a year-over-year workflow count growth from 60 billion to 80 billion and a transaction volume increase from 4.8 trillion to 6.4 trillion. Additionally, ServiceNow's cRPO grew 21% year-over-year in constant currency, indicating robust demand and successful expansion into customer service, HR, and security operations, all of which contribute to a positive future outlook for the company's revenue and free cash flow margins.

ServiceNow Inc. faces multiple downside risks that could negatively impact its stock valuation, primarily due to potential declines in its premium EV/revenue multiple as sentiment shifts and subscription revenue growth decelerates faster than anticipated. Additionally, increasing competition, particularly from Microsoft, and disappointing results in general work management are contributing factors that may affect the company's ability to retain customers and sustain growth. Weak investor metrics, such as Current Remaining Performance Obligations and Free Cash Flow Margin Expansion, along with unfavorable macroeconomic conditions, further complicate the outlook for ServiceNow's financial performance.