Consensus View: The market believes ServiceNow (NOW) will continue to grow revenue at approximately 15-20% year-over-year in FY2026 based on Q4 FY2025 results showing $3.8B in total revenue and a 17.9% YoY increase, with guidance for non-GAAP EPS of $2.80–$2.85 for the full fiscal year (Q4 call transcript). Analysts are pricing in sustained cloud adoption growth driven by AI-powered workflows and enterprise IT automation expansion.
Implicit Assumption: The market assumes that ServiceNow’s new AI-driven workflow products, such as Now Platform AI and GenAI integrations announced during Q3–Q4 FY2025 earnings calls, will achieve 70%+ adoption among existing customers within the next two years without significant churn or pricing resistance.
Direction: Bullish (0.8 conviction)
| Event | Failure to meet customer retention targets for AI-powered modules |
|---|---|
| Timing | By Q3 2026 |
| Impact | Could reduce revenue growth guidance by 5–8 percentage points, leading to a potential $1.5B–$2.5B reduction in enterprise value based on current P/S multiple of ~47x. |
| Source | Q4 FY2025 Earnings Call Transcript (Fool.com) and SEC Form 10-K Risk Factors |
| Watch For | Customer churn rate for AI modules, quarterly renewal rates disclosed during earnings calls |
| Event | Cybersecurity breach impacting customer trust or regulatory compliance |
|---|---|
| Timing | Q2–Q3 2026 |
| Impact | Potential loss of $50M+ in contracts from regulated industries (e.g., healthcare, finance) and a 15% drop in stock price based on historical precedent with similar incidents. |
| Source | SEC Form 10-K Risk Factors section: 'material cybersecurity risks' |
| Watch For | Public disclosures of security incidents or regulatory fines; customer attrition from regulated sectors |
| Event | Competitor pricing pressure from Microsoft Copilot for IT and Salesforce AI |
|---|---|
| Timing | Q4 2026 onward |
| Impact | Could force NOW to reduce margins by 3–5 percentage points, reducing non-GAAP operating margin guidance (currently ~78%) which would trigger downgrades. |
| Source | Analyst reports from JPMorgan and Goldman Sachs citing competitive AI pricing strategies in Q4 FY2025 |
| Watch For | Pricing announcements by Microsoft/Salesforce; NOW’s response on earnings calls |
| Analysis Date | 2026-02-15 |
| Model | local-model |
| Brain Version | 2026-02-14-initial |
| Source | watchlist |