As has become relatively common in 2026, analyst reactions to ServiceNow’s (NYSE: NOW) third-quarter (Q3) earnings proved to be in stark contrast to those of investors.
Specifically, much of Wall Street confirmed on the morning of Thursday, October 29, that it considers the equity a ‘Buy’ after the filing, while traders dumped NOW shares en masse, driving them 18.70% lower in the extended session from $150.13 at the closing bell to $122.06 at press time.
Wall Street reacts to ServiceNow stock’s latest earnings
To begin with, Robert W. Baird’s Robert Oliver, Cantor Fitzgerald analyst Thomas Blakey, and Tai Liani from Bank of America (NYSE: BAC) proved standout optimists even in the generally bullish chorus.
Advertisement
Along with confirming they regard ServiceNow stock as a ‘Buy’, they gave exceptionally high price targets of $185, $201, and $180, respectively.
By press time on October 29, Jackson Ader, an expert from Keybanc, was another standout, though at the other end of the spectrum, for issuing a ‘Sell’ recommendation on NOW shares and forecasting they would drop 26.73% from the latest close and 9.89% from press time to $110.
Finally, following the Thursday morning revisions, ServiceNow stock is overall considered a ‘Strong Buy’ by Wall Street analysts, and data Finbold retrieved from TipRanks indicates the equity is expected to rise 38.10% to $165.71 in the next 12 months.
Why NOW stock crashed 18.70% overnight after Q3 earnings
Meanwhile, both the expert and investor reactions were primarily triggered by the company’s latest earnings report.
According to the filing, ServiceNow recorded a 20% revenue rise in Q3 to $4.106 billion, beating the forecast of $4.095 billion. However, the company underperformed in terms of earnings per share (EPS), which grew 5% to $1, but fell below expectations, which called for $1.02.
Additionally, while most metrics showed strong results driven, in no small part, by artificial intelligence (AI) acceleration, the firm also disclosed that it expects a slowdown in contract growth.
Advertisement
Similarly, ServiceNow also raised its full-year subscription revenue outlook by just $15M at the midpoint, arguably contributing to the overnight sell-off, despite management’s insistence that timing and accounting effects explain at least part of the slowdown.
Featured image via Shutterstock
