ServiceNow shares plummet 18 percent for largest drop on record
ServiceNow shares plunged nearly 18 percent in premarket trading.
The short version
- The software platform reported revenue of $4.106 billion.
- Earnings fell short of Wall Street estimates at $1.
- JPMorgan raised its price target to $160 for 2027.
Check your portfolio today. ServiceNow, the enterprise software platform based in Santa Clara, California, just saw its shares tumble nearly 18 percent to $123.21 in premarket trading, putting the stock on track for its largest percentage drop on record according to Dow Jones Market Data.
The sudden drop hit after the company reported mixed third-quarter results. Revenue reached $4.106 billion, up 20.5 percent year-on-year and beating FactSet expectations of $4.095 billion. But earnings per share came in at $1, missing the $1.02 analysts had projected.
The platform also reported its current remaining performance obligations, a metric reflecting contracted revenue over the next 12 months, rose to $13.65 billion, But warned that fourth-quarter growth would slow to 18.5 percent. Analysts at JPMorgan, led by Samik Chatterjee, called the report a bit noisy in a Thursday note to investors, pointing to scope changes in the performance metric.
For JPMorgan, the gap between contracted revenue and actual growth will reverse as artificial-intelligence adoption accelerates for complex tasks. The investment bank raised its price target on the stock from $150 to $160 for 2027. Meanwhile, Goldman Sachs maintained a price target of $154, and DA Davidson held its target at $170.
For anyone holding tech shares in a retirement account, a single earnings miss can erase months of gains before breakfast.
Photo: Donny Gonzo, CC0, via Wikimedia Commons
