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Special Report The Time to Buy ServiceNow Is Now: Oversold and Ready for a ReboundAuthored by Thomas Hughes. Date Posted: 1/31/2026. 
At a Glance - ServiceNow looks set up for a 2026 rebound and may just need one clear catalyst to bring retail buyers back.
- Institutions are buying into the pullback in early 2026, treating it as a value-driven entry point.
- Cash flow and growth execution support the outlook, with recent equity gains reinforcing the longer-term case.
Valuation concerns capped ServiceNow (NYSE: NOW) price action in 2025, creating a correction and a buying opportunity that is unfolding in 2026. The Q4 release not only affirmed the company’s strengths but also reinforced its longer-term outlook and deepening value. Trading at roughly 30x current earnings and about 15x the 2030 outlook, the stock suggests a solid double-digit to triple-digit price advance may lie ahead. Institutional activity is another factor highlighting the early-2026 opportunity. Institutions sold on balance in Q4 2025—harvesting losses for tax purposes—but bought on balance for the full year and accelerated activity in early 2026. Buying in January topped $6 billion, or roughly 4% of market cap, and is likely to remain meaningful given the value opportunity. Jerome Powell says gold is not money. The Fed says inflation is under control and the dollar is strong. But look at what they do. Central banks bought more gold last year than any time since 1967. China dumped $100 billion in U.S. debt, then bought gold. Poland, Hungary, Singapore, and Turkey are all loading up. In 2022, the U.S. froze Russia's money and showed the world that assets can be seized. Now major nations want out. There's only one asset no one can freeze: gold. Get the name and ticker of one stock positioned for this shift. Highlights from the Q4 release include a $5 billion increase in the buyback authorization. The buybacks are aimed at offsetting dilution and are an important consideration for investors. Although ServiceNow doesn’t buy back shares aggressively or pay dividends, it continues to invest heavily in growth and delivered an attractive roughly 35% equity gain for investors in 2025. The year-end balance sheet suggests the company is well-positioned to keep executing its strategy, and the 2026 outlook points to another double-digit equity gain ahead. Generative AI Drives Q4 Strength for ServiceNow ServiceNow reported a solid quarter, with revenue rising more than 20% to over $3.5 billion. Growth was driven by subscriptions, up 21% year-over-year, powered by agentic and generative AI tools and continued client expansion. Now Assist, the company’s generative AI tool, is a growth pillar—up more than 100% year-over-year—while net new contract volume for deals over $1 million jumped about 40%. Margin news was favorable despite the market reaction. The company delivered margin strength supported by revenue leverage and operational discipline, leaving adjusted earnings ahead of expectations. Adjusted EPS of $0.92 was $0.03 ahead of the MarketBeat-tracked consensus, and management offered a robust 2026 outlook. Guidance calls for revenue growth to slow into the high-teens to low-20s percentage range—still above consensus—and management may be conservative given the increase in remaining performance obligations (RPO). Current RPO (cRPO) rose 25%, and total RPO increased 26.5%, suggesting the potential for acceleration in 2026. ServiceNow Stock Overextends, Diverges From Indicators ServiceNow’s share price plunged more than 10% following the Q4 release and guidance update and could face continued near-term weakness. However, technical indicators showed notable divergences in the stochastic and MACD, implying the selloff may be overextended and a meaningful rebound is possible. In that scenario, the stock could find a bottom in early 2026 and set up for a recovery later in the year. The December stock split also influenced recent market action. Splits often create a selling opportunity for some investors, which can add short-term downward pressure. Importantly, companies that split their stock tend to have strong underlying businesses, cash flow, and capital-return profiles—factors that often support higher prices over the long term. Given those conditions, the current selling pressure on ServiceNow could shift toward a more accumulation-focused market. The catalyst for a rebound will likely arrive with an upcoming quarterly report. Sustained operational strength could prompt analysts to adopt a more bullish stance and draw retail buyers back into the market. For now, analysts have trimmed price targets for this Moderate Buy-rated stock, moving them toward the low end of the range—roughly where the stock is currently trading—which helps establish a potential floor near key support. 
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