ServiceNow Sees Q1 Beat on AI Demand, Oppenheimer Holds $130 Target
Analysts forecast ServiceNow to report Q1 EPS of $0.96–$0.97 on revenue near $3.74–$3.75 billion, with stable IT budgets offsetting contract delays and weak federal spending. Oppenheimer maintains an Outperform rating with a $130 price target, citing accelerating AI workflow adoption despite a 72% drop in government obligations.
1. Q1 Profit and Sales Outlook
Analysts forecast EPS between $0.96 and $0.97 on revenue near $3.74–$3.75 billion for Q1, implying a modest beat driven by stable IT budgets. Weak federal spending and delayed contracts pose headwinds to near-term revenue growth.
2. Strengthening AI-Driven Workflow Demand
Partner checks indicate rising adoption of ServiceNow’s AI-powered workflow solutions, positioning the platform to capture ROI-focused IT spending and support longer-term subscription growth.
3. Government Obligations and cRPO Impact
Federal contract requirements declined 72% year-over-year to about $48 million, less than half the seasonal average, weighing on the Current Remaining Performance Obligations metric and near-term visibility.
4. Analyst Rating and Price Target
Oppenheimer retains an Outperform rating with a $130 price target while modestly trimming multiples, reflecting confidence in ServiceNow’s AI momentum despite a 43% YTD stock decline.