ServiceNow, Inc. (NOW.N): Mixed Checks, But Still See Upward Bias to 2Q + 2026 Estimates

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ServiceNow, Inc. (NOW.N): Mixed Checks, But Still See Upward Bias to 2Q + 2026 Estimates

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15 Jul 2026 01:52:27 ET │ 21 pages

ServiceNow, Inc. (NOW.N)

Mixed Checks, But Still See Upward Bias to 2Q + 2026 Estimates

CITI'S TAKE

Our ServiceNow partner fieldwork came in more mixed with some partners

missing or just meeting targets, noting an uptick in customer confusion

from recent pricing/packaging changes. This sentiment was echoed in our Buy

CIO survey where customers cited ServiceNow as a vendor to cut to free up Price (14 Jul 26 16:00) US$104.85

budget for AI, despite overall IT budget growth expectations increasing. At

the same time, we believe 2Q results benefited from effective price Target price US$156.00↓

increases and/or early renewals ahead of new packaging changes. Net-net from US$158.00

we remain more measured going into 2Q earnings, keeping our estimates Expected share price return 48.8%unchanged but lying slightly ahead of the street on a cc basis for ‘26/27. Our

TP moves from $158 to $156 (8.3x FY27E EV/S or 22.9x EV/FCF) and we Expected dividend yield 0.0%

remain Buy-rated with a positive 12-month view, seeing NOW as one of the Expected total return 48.8%

better positioned in app software with a strong organic profile and unique Market Cap US$108,133MAI portfolio (Armis/Veza/Control Tower/Autonomous Workforce, etc.)

CIO Survey + Partner Data Turn Slightly More Pessimistic — Partner feedback was

mixed but tilted more cautiously, with our checks noting confusion among

Price Performancecustomers regarding new subscription tiers coming out of Knowledge, and still no

visible inflection in AI usage. We spoke with partners who either missed or barely met (RIC: NOW.N, BB: NOW US)

2Q targets, with April + May appearing slower vs. last year.