Why Is ServiceNow Stock Falling Thursday?

by | Jan 29, 2026 | General

ServiceNow Inc. (NYSE:NOW) stock fell Thursday as investors digested the company’s fourth-quarter earnings released after the prior session’s close.

The Catalyst

The stock decline comes despite ServiceNow beating analyst estimates on both revenue and earnings. The company reported fourth-quarter revenue of approximately $3.57 billion, surpassing the consensus estimate of $3.53 billion, according to Benzinga Pro. Adjusted earnings came in at 92 cents per share, beating analyst estimates of 88 cents per share.

Earnings Performance

Total revenue increased 20.5% year-over-year, while subscription revenue climbed 21% year-over-year. ServiceNow reported remaining performance obligations of $28.2 billion at quarter’s end, up 26.5% year-over-year.

Forward Guidance And Strategic Moves

ServiceNow expects first-quarter subscription revenue of $3.65 billion to $3.655 billion. The company sees full-year 2026 subscription revenue in the range of $15.53 billion to $15.57 billion, representing about 21% year-over-year growth.

The company repurchased approximately 3.6 million shares for $597 million during the quarter. ServiceNow’s board also authorized an additional $5 billion in share repurchases.

Additionally, ServiceNow announced a collaboration with Anthropic on Wednesday to integrate Claude models into core workflows.

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $784.30. Recent analyst moves include:

  • Jefferies: Buy (Lowers Target to $175.00) (Jan. 23)
  • Citigroup: Buy (Lowers Target to $235.00) (Jan. 22)
  • BTIG: Buy (Maintains Target to $200.00) (Jan. 22)

Valuation Insight: While the stock trades at a premium P/E multiple, the strong consensus and 11% expected earnings decline suggest analysts view this growth as justification for the 76% upside to analyst targets.

Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for Benzinga Edge scorecard for ServiceNow, highlighting its strengths and weaknesses compared to the broader market:

  • Value Rank: 11.43 — The stock is trading at a steep premium relative to peers.
  • Growth Rank: 82.28 — Indicates strong growth potential.
  • Quality Rank: 53.04 — Balance sheet remains healthy.
  • Momentum Rank: 3.82 — Stock is underperforming the broader market

NOW Price Action: ServiceNow shares were down 8.32% at $118.84 during premarket trading on Thursday, according to Benzinga Pro data.

Photo by JHVEPhoto via Shutterstock