$NOW stock call: I'm a buyer, add $90 to $98

$NOW: I'm a buyer and I'd add between $90 and $98.

10% below its 200-day after a 27% drop on earnings
About 21x next year's expected earnings

I think one soft backlog forecast does not break a business that still renews 98% of its customers.

Not financial advice

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The bear case is real. ServiceNow guided Q4 cRPO growth to 18.5%, down from 21% in Q3 and below what analysts expected. That number covers contracted revenue for the next 12 months, so it is the best early read on 2027. Adjusted EPS of $1.00 also missed the $1.02 estimate and GAAP net income fell to $277M from $502M. The bigger fear is that AI agents reduce the number of seats customers pay for.

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The chart: the stock ran from $81.24 on April 10 to $159.50 on October 23. I count the fall since then as an A-B-C. A ended at $103.51 on October 30, B bounced to $112.35 on November 4 and C reached $97.00 on November 10. The 78.6% retrace of the whole rally is $97.99 and the June and July lows sit at $89.39 and $91.53.

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The business is still growing at about 20%. Q3 revenue rose 20.5% to $4.106B and subscription revenue rose 21% to $3.988B. Remaining performance obligations were $29.7B, up 22%. Management raised its free cash flow margin target to 36% and its AI contract value target to $1.7B. Analysts expect about $4.80 a share in 2027, so $102 is about 21 times that.

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My plan: I'd buy a starter here, add between $90 and $98 and hold for years. A weekly close below $81, the April low, means my count is wrong and I'd wait. The late January report is the test, since cRPO needs to hold near 18.5% and the first 2027 guide needs to stay near 20%. I am comfortable being early on a business at 21 times earnings.

Sources: ServiceNow Q3 2026 results release · CNBC: ServiceNow worst day ever after Q3 · TNW: record drop on cRPO outlook · MarketWatch via Morningstar: what went wrong · Investing.com: Q3 call transcript (98% renewal rate) · TIKR: 2027 EPS est $4.80, 5-yr avg 52x

Not financial advice. For informational and educational purposes only.