NOW
Another target cut, but not a full breakup
ServiceNow is having one of those weeks where Wall Street keeps sending mixed signals. TD Cowen just chopped its price target to $140 from $185, yet it kept a Buy rating on the stock. Translation: the firm still likes the company, but it’s no longer pretending valuation can stay in la-la land forever.
The bull case is still alive
The interesting part is what TD Cowen didn’t do. It didn’t toss out the AI story, the growth story, or the platform expansion story. In fact, it said its checks remain constructive on:
- overall growth trends
- AI SKU adoption
- large deal activity
- broader platform attach
That’s analyst-speak for “the business still looks solid, we just want to pay less for it.”
Why investors should care
This comes ahead of ServiceNow’s first-quarter earnings on April 22, so the target cut lands right before the company has a chance to either validate the optimism or ruin the mood. TD Cowen also thinks the company’s pricing and packaging changes should be a net positive, which is another way of saying the numbers may still have some spring in them.
But valuation is the spicy part
The stock has already been under pressure, falling 27% since the fourth-quarter earnings report and down 38.5% year to date. So even though TD Cowen is still on team ServiceNow, the message is pretty clear: the market may have to get used to a world where the stock is judged less like a rocket ship and more like a very expensive spreadsheet.
Big picture: ServiceNow still has plenty of believers, but the multiple is getting trimmed back to earth. If earnings on April 22 come in hot, this could look like classic Wall Street hand-wringing. If not, the valuation crowd gets to say, “we told you so.”