ServiceNow (NOW) Stock Drops 23% YTD — BNP Paribas Says Buy the Dip

TLDR

• BNP Paribas upgraded ServiceNow (NOW) from Neutral to Outperform on March 16, 2026.
• The stock is down 23% year-to-date, which BNP sees as a buying opportunity.
• Analyst Stefan Slowinski raised his price target from $120 to $140.
• BNP expects NOW to hit roughly 20% subscriber organic revenue growth by end of fiscal 2026.
• The upgrade cites AI monetization potential and strong margin quality as key positives.

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ServiceNow (NOW) got a vote of confidence from BNP Paribas on Monday, as the investment bank upgraded the stock to Outperform and lifted its price target to $140 from $120.

ServiceNow, Inc., NOW

The call came from BNP analyst Stefan Slowinski, who said the recent sell-off has created a more attractive entry point for investors. NOW is down 23% year-to-date heading into the upgrade.

The analyst pointed to three things he wants to see from software businesses: core business stability, credible AI monetization, and quality margins with stock-based compensation kept in check. He said NOW checks all three boxes.

BNP now expects ServiceNow to exit fiscal 2026 with subscriber organic revenue growth of around 20%. That would be up from the roughly 18% the company guided to in Q1.

Slowinski sees further upside if customers accelerate upgrades from Standard and Pro tiers to Pro Plus. He also flagged potential tailwinds from customers returning after Assist Pack purchases.

AI Monetization in Focus

The upgrade leans heavily on ServiceNow’s ability to turn AI investment into real revenue. BNP’s call suggests the market may be underpricing that potential, especially after a tough start to the year for the stock.

Pro Plus, the company’s higher-tier offering, is central to that thesis. If adoption picks up, Slowinski believes it could push growth above what the current guidance implies.

ServiceNow’s gross margin sits at 77.53%, and its operating margin is 13.74%. Revenue has grown at a three-year CAGR of 21.2%, giving the upgrade some financial grounding beyond just sentiment.

Balance Sheet Holds Up

The company’s debt-to-equity ratio is 0.19, and its interest coverage ratio comes in at 79.3 — both pointing to a clean balance sheet with limited financial stress.

The Altman Z-Score of 6.54 puts ServiceNow firmly in financially stable territory. Insider activity over the past three months has been mixed, with one buying transaction recorded.

NOW’s market cap stands at approximately $120 billion. BNP’s new $140 price target represents upside from current levels following the year-to-date decline.

The upgrade is BNP’s latest move on the stock, with the revised target of $140 now on the books as of March 16, 2026.

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