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ServiceNow (NOW) shares have decreased by 25.4% over the past year, contrasting with the Zacks Computer and Technology sector’s increase of 25.4% and the Computers IT Services industry’s decline of 19.2%. This downturn is linked to a challenging macroeconomic climate and a slowing subscription revenue growth rate. For Q4 2025, ServiceNow anticipates a subscription revenue in the range of $12.835 billion to $12.845 billion, reflecting a growth rate of 20% from 2024, slower than 23% growth achieved in 2024.
The company reported that AI product revenue is forecasted to exceed $0.5 billion in annual contract value (ACV) in 2025, aiming for $1 billion in 2026. Additionally, ServiceNow’s recent acquisition of Veza is expected to enhance its portfolio in identity security, supporting its growth strategy amidst tightening budgets for U.S. federal agencies.
As of now, ServiceNow holds a Zacks Rank #3 (Hold), indicating investors should wait for more favorable conditions before considering the stock. Current trends in 2025 and 2026 forecast earnings at $17.28 per share (up 2.7% over the past 60 days) and $20.15 per share (up 1.6% over the past 60 days), respectively.
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