Is NOW Stock Poised for Recovery? Cantor Fitzgerald Sees Strong Buying Opportunity

ServiceNow’s now stock has experienced a notable correction from its 2025 highs, trading in the $850-860 range after peaking near $1,198 just months earlier. This approximately 17% pullback over the past year has created what analysts consider a compelling valuation inflection point. Cantor Fitzgerald’s research team, led by analyst Thomas Blakey, recently reiterated confidence in the turnaround potential with an Overweight rating and $240 price target, arguing that current weakness masks underlying strength.

The pullback has compressed ServiceNow’s trading multiple to just 8.5x projected 2027 revenue—a three-year valuation low that stands in stark contrast to the stock’s premium-priced history. This valuation compression matters because it reflects temporary market pessimism rather than deteriorating business fundamentals.

Why Valuations Are Signaling Opportunity

ServiceNow demonstrated resilience in recent quarters, with Q3 revenue reaching $3.41 billion, up 22% year-over-year—a rate that significantly exceeded consensus expectations. The company’s subscription revenue component grew approximately 20.5% in constant currency, reaching $3.3 billion, while non-GAAP operating margins expanded to 33.5%. Earnings per share climbed to $0.96 from $0.74 year-over-year, further validating management’s operational execution.

These results underscore a critical insight: the stock’s 17% decline stems from temporary sentiment shifts and macro concerns rather than execution failures. When a consistently growing SaaS platform trades at eight-times forward revenue—its lowest level in three years—it typically presents a tactical buying window for long-term investors.

Multiple Growth Catalysts Are Converging

Cantor Fitzgerald identifies several reinforcing tailwinds that could drive acceleration beyond current consensus expectations, which project just 18% revenue growth in 2027. The firm believes this estimate may prove conservative given several emerging dynamics.

Seat Expansion and Platform Penetration Organizations continue expanding ServiceNow deployments across additional departments and use cases. Rather than replacing legacy vendors, companies are adding seats and extending the platform deeper into their workflows—a high-margin expansion model that drives organic growth without proportional cost increases.

Federal Sector Momentum Government agencies accelerating digital modernization initiatives have become a standout growth driver, consistently delivering results that exceed management’s initial guidance. This historically stable, long-contract-duration segment provides both revenue predictability and expansion opportunities as agencies modernize aging IT infrastructure.

AI Platform Reaching Inflection Point Management has set an ambitious $1 billion annual contract value target for its ServiceNow AI platform by end of 2026. The company is methodically building out its AI data stack with governance and security enhancements designed to address enterprise compliance requirements. This positions ServiceNow to capture meaningful value from the AI-driven software transformation wave rather than serving as a pure infrastructure player.

Strategic M&A Expanding Total Addressable Market Acquisitions are broadening ServiceNow’s serviceable market rather than simply buying near-term growth. Cantor notes this M&A activity aligns with strategic themes emphasized during the Knowledge 2025 conference, suggesting coordinated, disciplined capital deployment.

2026-2027 Outlook: Consensus May Be Underestimating Upside

Current guidance and analyst projections suggest 2026 will deliver EPS growth exceeding 20%, driven by both platform scaling and AI-driven upsell opportunities. The company projects current-quarter revenue around $3.52 billion, representing 19% year-over-year growth—a pace that remains robust despite macro uncertainties.

Wall Street’s consensus price target clusters around $1,140, with individual projections ranging from $734 to $1,300. These figures imply meaningful upside from current trading levels if execution materializes. The wide range reflects uncertainty about which growth drivers will prove most impactful over the next 18-24 months.

The company’s 5-for-1 stock split, completed in late 2025 following a quarter that beat estimates and included raised guidance, was explicitly designed to improve retail investor access. The board recognized that lower per-share pricing removes a psychological barrier for individual investors while maintaining institutional confidence.

The Risk Dimension

Management acknowledges that macro headwinds and IT-spending cycles could pressure near-term results. Consensus includes these risks in its 18% growth projection for 2027, yet Cantor Fitzgerald sees potential for upside if the confluence of AI adoption, federal modernization, and seat expansion accelerates faster than historical precedent.

Bottom Line

NOW stock’s current valuation represents a technical reset in a fundamentally sound business with multi-year growth visibility. For investors comfortable with software sector volatility, Cantor Fitzgerald’s analysis suggests the 17% pullback has created an asymmetric risk-reward opportunity. The combination of depressed valuation multiples, accelerating AI monetization, and federal sector tailwinds positions NOW stock as a potential outperformer if analysts’ 2027 growth scenarios materialize.