ServiceNow (NOW) Stock: Recent Weakness Attracts After-Hours Trading Interest

Recent market pressure on ServiceNow shares presents an intriguing case study for active traders monitoring NOW after-hours activity. The stock has retreated meaningfully from its January 2025 peak of $1,198, currently trading in the $850-860 range—representing a 17% decline over the past year. Yet beneath the surface, a compelling narrative emerges that’s capturing the attention of professional analysts and institutional investors alike.

Valuation Compression Creates Now-Attractive Entry Levels

ServiceNow now trades at just 8.5x projected 2027 revenue, marking the stock’s most attractive valuation multiple in three years. This compression stands in sharp contrast to the company’s demonstrated execution. Third-quarter results delivered $3.41 billion in revenue, reflecting robust 22% year-over-year growth. Earnings per share came in at $0.96 compared to $0.74 in the prior-year period—both metrics handily beat consensus expectations.

The subscription revenue engine continues firing on all cylinders. Subscription revenues reached $3.3 billion with approximately 20.5% constant-currency growth. More notably, non-GAAP operating margins expanded to 33.5%, underscoring management’s ability to scale efficiently while maintaining profitability. These metrics suggest that current valuation multiples may not adequately reflect ServiceNow’s underlying operational momentum.

Multiple Catalysts Setting Stage for After-Hours Rallies

Cantor Fitzgerald analyst Thomas Blakey reiterated an Overweight rating in early January with a $240 price target—a bullish signal for investors monitoring NOW after-hours trading patterns. The firm identified several distinct growth engines worth monitoring.

Seat expansion represents the first pillar. More enterprises are deploying ServiceNow across additional departments and business units, expanding the installed base of users without requiring entirely new platform implementations. This organic expansion opportunity has historically driven margin-accretive growth.

Federal sector business continues to surprise to the upside. Government agencies are accelerating modernization initiatives, and ServiceNow has successfully positioned itself as the platform of choice for this mission-critical work. This vertical concentration provides both revenue stability and competitive moat characteristics.

The artificial intelligence story is accelerating faster than many anticipated. Management targets $1 billion in annual contract value from ServiceNow AI capabilities by the end of 2026—a meaningful milestone that would position AI as a substantial revenue contributor. The company is building out its AI data stack with enhanced governance and security features, appealing to enterprise clients with stringent compliance requirements.

Mergers and acquisitions activity is creating additional opportunities. Rather than pursuing acquisitions for near-term growth, ServiceNow is strategically expanding its total addressable market through targeted platform enhancements. This disciplined approach should drive sustainable, profitable growth trajectories.

2027 Projections Suggest Conservative Consensus Estimates

Current analyst consensus pegs 2027 revenue growth at 18%—a figure Cantor Fitzgerald believes understates NOW’s actual potential. When factoring in seat expansion acceleration, federal business outperformance, AI adoption curves, and M&A-driven market expansion, the analyst sees meaningful upside relative to current expectations.

Current-quarter revenue guidance sits around $3.52 billion, representing 19% year-over-year expansion. Full-year 2026 EPS growth is projected to exceed 20%, reflecting both platform scaling and AI-powered upsell opportunities that management consistently emphasizes.

Analyst consensus price targets cluster around $1,140, with individual targets ranging from $734 to $1,300. These projections imply 33-52% upside from current trading levels should market conditions normalize and operational performance meets expectations. Risk factors remain on the radar—macro environment deterioration and IT spending reductions could constrain near-term performance.

Structural Changes Supporting Long-Term Positioning

ServiceNow completed a 5-for-1 stock split in late 2025 following a quarter that beat estimates and included raised forward guidance. The board’s decision to execute the split specifically aimed at broadening retail investor participation—a move that could support after-hours trading liquidity as more individual investors gain access to NOW shares at lower nominal prices.

The firm’s Knowledge 2025 conference reinforced management’s commitment to the strategic priorities outlined above. Board-approved strategic initiatives demonstrate conviction in long-term market opportunities, providing additional conviction for investors evaluating multi-year return scenarios.

At current valuation multiples and given the constellation of growth catalysts ahead, ServiceNow appears positioned for substantial appreciation if management execution remains intact and external headwinds don’t materialize.