2026

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<h2 id="key-takeaways">Key Takeaways</h2><ul><li>Stifel reduced ServiceNow’s price target from $180 to $135 while maintaining its Buy recommendation</li><li>Shares have declined 43% over six months, hovering near the 52-week low</li><li>Sluggish U.S. government spending and typical Q1 softness are primary concerns</li><li>Federal segment revenue has declined significantly compared to robust year-ago performance</li><li>First quarter 2026 results scheduled for April 22; analysts project $3.75B in revenue</li></ul>Stifel has reduced its price objective for ServiceNow (NOW) from $180 down to $135, pointing to challenging conditions in federal government spending and lackluster momentum entering the year. Despite the downgrade, the investment firm maintained its Buy recommendation.<a href="https://knockoutstocks.com/stock/NOW" rel="noopener noreferrer nofollow"> <img src="https://knockoutstocks.com/api/stocks/NOW/embed" alt="NOW Stock Card"> ServiceNow, Inc., NOW </a>The revision follows Stifel’s due diligence with system integration partners, which revealed a slight deterioration in quarterly sentiment. Multiple contacts attributed the weakness to typical seasonal patterns as sales teams rebuild pipelines after an intense year-end closing period.The government sector has experienced a notable year-over-year contraction, especially when compared against exceptionally strong prior-year results that delivered 30% expansion. Stifel’s analysis indicates this downturn incorporates a $15 million de-obligation connected to the Deferred Resignation initiative, though analysts believe this factor was likely already reflected in the company’s initial projections.<blockquote>“It appears the Fed business is down meaningfully Y/Y vs. what was a very strong year-ago comp,” Reback wrote. The analyst added that the drop appears worse than management had originally anticipated.</blockquote>Stifel now anticipates approximately 50 basis points of first quarter current remaining performance obligation (cRPO) outperformance — a decline from the roughly 100 basis points seen last quarter. This positions expected cRPO expansion at around 20.5% year-over-year in constant currency terms, marginally exceeding the company’s 20% forecast.<h2 id="government-sector-challenges">Government Sector Challenges</h2>The lowered price objective also accounts for <a href="https://coincentral.com/servicenow-now-stock-drops-23-ytd-bnp-paribas-says-buy-the-dip/" rel="noopener noreferrer nofollow">ServiceNow’s</a> evolving business dynamics as clients increasingly adopt its artificial intelligence capabilities. This transition brings consumption-based revenue streams and potential pressure on gross margins, although the company maintains a healthy 77.5% gross profit margin over the trailing twelve months.Stifel anticipates federal performance will strengthen in the second quarter of 2026, observing that this period absorbed the most significant DOGE-related disruptions in 2025, creating an easier year-over-year benchmark.System integration partners expressed greater confidence regarding the Q2 opportunity pipeline, offering some encouragement for the latter half of the fiscal year.<h2 id="upcoming-quarterly-report">Upcoming Quarterly Report</h2><a href="https://coincentral.com/servicenow-now-stock-drops-23-ytd-bnp-paribas-says-buy-the-dip/" rel="noopener noreferrer nofollow">ServiceNow</a> plans to announce first quarter 2026 financial results on April 22 following market close. Wall Street consensus anticipates adjusted earnings per share of $0.97, GAAP EPS of $0.53, and total revenue of $3.75B. Management’s official guidance projected revenue in the range of $3.650B to $3.655B.Although the company has delivered revenue growth exceeding 20% for three consecutive quarters, shares have faced persistent selling pressure, declining more than 40% across the past half-year.Several other analysts have recently adjusted their projections downward. FBN Securities lowered its target from $220 to $160 while keeping an Outperform rating. BNP Paribas Exane maintained its Outperform stance with a $140 objective.Citizens takes a more optimistic view, maintaining a Market Outperform rating with a $260 price target and forecasting Now Assist ACV will reach $1 billion by year-end 2026.NOW currently trades near its 52-week low of $98, with shares at $104.04 at the time of writing.The post <a href="https://blockonomi.com/servicenow-now-stock-faces-pressure-as-federal-spending-concerns-mount/" rel="noopener noreferrer nofollow">ServiceNow (NOW) Stock Faces Pressure as Federal Spending Concerns Mount</a> appeared first on <a href="https://blockonomi.com" rel="noopener noreferrer nofollow">Blockonomi</a>.

ServiceNow (NOW) Stock Faces Pressure as Federal Spending Concerns Mount

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