Alex Sirois
6 min read
Quick Read
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Bernstein holds a Street-high $266 target on NOW, implying 77% upside versus the consensus target’s modest 5% upside.
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Salesforce (CRM) is down only 4% over one year and carries an 18% consensus upside, making it more compelling than NOW on a consensus basis.
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ServiceNow’s AI net new ACV grew 65% and agentic AI consumption rose 13x, but the CFO doesn’t expect that momentum to drive strong revenue growth until 2027.
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ServiceNow (NYSE:NOW) trades at $149.85. The average analyst price target is $157.12, which implies 4.9% upside.
ServiceNow sells the workflow software that large enterprises use to run IT, HR, customer service and security, and it now markets itself as the governance layer for corporate AI agents. The consensus gap is modest. The headline gap belongs to one firm. Bernstein holds a Street-high target of $266, which implies 77.5% upside. When one firm projects that much more upside than the consensus, investors need to work out whether it is spotting something early or is too optimistic.
That question matters more after a third-quarter report the market disliked.
AI Displacement Fears and an EPS Miss Keep ServiceNow Grounded
The biggest drag has been fear that AI agents will eat away at seat-based enterprise software. Jim Cramer described ServiceNow as hit hard by “the displacement trade”, and in April he noted the stock was down 42% for the year. Over the past 52 weeks, shares have traded between $81.24 and $192.97.
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The third quarter added new problems. Revenue of $4.11 billion grew 20.5% and beat estimates. However, non-GAAP EPS of $1.00 missed the $1.02 consensus, which ended a six-quarter beat run. GAAP operating margin fell to 9.5% from 17% because of acquisition-related amortization and severance tied to the Armis, Veza and Moveworks deals. Management also guided fourth-quarter cRPO growth down to 18.5%, and Bloomberg reported that the outlook revived AI fears. Shares fell 3.18% during the regular session.
