What You Need To Know Ahead of ServiceNow’s Earnings Release

Core Viewpoint - ServiceNow, Inc. is expected to report strong earnings growth, with analysts projecting a profit increase of 23.1% year-over-year for Q4 2025, despite recent stock underperformance and concerns over a significant acquisition [1][2][4]. Financial Performance - The company has a market capitalization of $153.1 billion and is anticipated to report earnings per share (EPS) of $0.48 for Q4 2025, up from $0.39 in the same quarter last year, marking a 23.1% increase [1]. - For the full fiscal year 2025, analysts expect an EPS of $1.96, reflecting a 36.1% increase from $1.44 in fiscal 2024, with further growth projected to $2.37 in fiscal 2026, a year-over-year increase of 20.9% [2]. Stock Performance - Over the past 52 weeks, ServiceNow's shares have declined by 30.9%, underperforming the S&P 500 Index, which rose by 16.2%, and the State Street Technology Select Sector SPDR ETF, which returned 22.9% [3]. Acquisition and Market Sentiment - The recent decline in stock price is attributed to investor reactions to the company's $7.75 billion acquisition of cybersecurity firm Armis, which is the largest in ServiceNow's history and raises concerns about balance sheet risk and strategic direction [4]. - KeyBanc Capital Markets downgraded the stock to "Underweight" from "Sector Weight," citing fears that AI automation could reduce software seat counts and pressure long-term demand, contributing to negative market sentiment [5]. Analyst Ratings - The consensus opinion on ServiceNow stock is highly bullish, with a "Strong Buy" rating from 33 out of 43 analysts, while the mean price target of $225.02 indicates a potential upside of 51.2% from current levels [6].