ServiceNow Price Target Slashed 25% to $135 on Federal Spending Weakness
Stifel analysts cut ServiceNow’s price target to $135 from $180, citing a significant year-over-year decline in federal business and $15 million de-obligation from the Deferred Resignation program. They now forecast about 50 basis points of cRPO upside and 20.5% constant-currency growth for Q1 2026, slightly above company guidance.
1. Stifel Cuts Price Target
Stifel analysts reduced ServiceNow’s price target to $135 from $180, reflecting a softer start to 2026 driven by seasonal weakness and a significant year-over-year drop in U.S. federal contract spending compared with last year’s 30% growth.
2. Federal Business and Program Impact
The year-over-year federal decline includes a $15 million de-obligation tied to the Deferred Resignation program, which was already factored into guidance as agencies re-evaluated requirements and paused contract obligations early in the year.
3. Growth and cRPO Forecast
Stifel projects about 50 basis points of cRPO upside in Q1, translating to roughly 20.5% constant-currency revenue growth, slightly above ServiceNow’s 20% guidance, with organic growth closer to 19.5% after a 100 basis-point contribution from Moveworks.
4. Upcoming Q1 Earnings and Stock Trends
ServiceNow will report results on April 22 with consensus estimates of $0.97 adjusted EPS and $3.75 billion revenue versus guidance of $3.65 billion to $3.655 billion; the stock has fallen over 40% in six months and dipped around 2% following the target cut.