NOW
Same stock, smaller number
Oppenheimer took a haircut to ServiceNow’s price target, slashing it from $175 to $130. But don’t confuse that with a full-on breakup note — the firm kept its Outperform rating, which is Wall Street’s way of saying, “We still like the relationship, we’re just rethinking the wedding budget.”
Why the target came down
The big issue isn’t that ServiceNow suddenly forgot how to sell software. It’s that the market’s appetite for enterprise software multiples has cooled, and Oppenheimer said that lower group-wide valuations were enough to drag its target down. In other words: same company, less generous math.
AI is still the shiny object
Oppenheimer also said the first-quarter update probably won’t magically erase the current AI-disruption narrative around ServiceNow. But it does expect a few things investors love to hear:
- bullish AI metrics
- better margins from internal AI-driven efficiency
- less hiring
- rising capital returns
That’s the kind of checklist that can keep the bulls circling, especially after a sharp year-to-date selloff that’s left expectations looking pretty beaten up.
The setup into earnings
ServiceNow reports earnings on April 22, so this is basically the pre-game show. Oppenheimer thinks stronger post-earnings estimate revisions could help the stock if management shows that AI is boosting, not bulldozing, the story.
There are still some potholes, though. The firm flagged softer federal government activity and a more cautious enterprise software buying environment. Big picture: ServiceNow is still getting respect, but Wall Street just turned the volume knob down on how much it’s willing to pay for it.