ServiceNow heads into its July 22 earnings window with an unusual alignment: the Street is turning more constructive just as short interest posts its first meaningful weekly decline in a month.
The most notable development this week is a fresh upgrade. Guggenheim lifted its rating from Neutral to Buy on July 1, setting a $125 target — the first new bullish call on the name in several weeks. That adds to a broadly constructive analyst picture: 35 Buy ratings against just 3 Holds, with the consensus target at $141, roughly 42% above the current price of $99.28. Most recent analyst moves have been upward adjustments. Barclays, Evercore ISI, and Benchmark all raised targets post-earnings in May, even as the stock remained well below prior levels. The bear case centers on the historic CRPO decline — contracted obligations fell $207 million sequentially, the largest drop on record — and the near-total collapse of the Federal Government business, down 72% year-over-year. Bulls counter with FY25 net new annual contract value of $2.33 billion, 9% growth, and a credible path to 17%-plus subscription revenue growth by FY27 as AI-driven expansion takes hold. The tension between those two reads is exactly what the July 22 print will need to resolve.
Short interest has taken a small step back from the prior note's warning level, though the retreat is modest. Shares short edged down 1.1% on the week to 62.8 million, or 30.3% of free float — off the early-June peak of 68.4 million but still elevated versus where the position stood in late May at around 52 million. The short score has barely moved, oscillating between 40.2 and 40.7 all week, a range so tight it signals neither fresh conviction from bears nor any meaningful covering impulse. The lending market explains why: availability is running at 1,738%, meaning roughly seventeen shares remain available for every one already borrowed, and cost to borrow is just 0.40%. There is no squeeze pressure, no borrow scarcity, and no cost friction to force shorts out. Bears can sit comfortably.
Options positioning is the one signal that leans against the cautious short-side read. The put/call ratio has fallen to 0.73, about 1.6 standard deviations below its 20-day average of 0.76 — meaning options traders are less hedged than usual, not more. Call activity has picked up relative to puts, suggesting at least part of the market is positioning for upside into the print rather than protecting against downside. That reading sits in contrast to where the PCR was in late May (closer to 0.71-0.73), but the 52-week range runs from 0.60 to 1.17, so current levels are far from extreme in either direction.
The stock gained 3.5% on the week to close at $99.28 but remains down 20% over the past month — a sharper fall than close peers WDAY and HUBS, which rose 6.3% and 5.3% respectively on the week. GWRE was the standout in the peer group, up 12.2%, while TEAM was the sole decliner, off 4.4%. The relative underperformance of NOW versus the software group over the past month reflects the market's unresolved read on whether the CRPO shock was a one-quarter anomaly or the start of a structural deceleration.
What to watch heading into July 22 is whether the short-side conviction that built through June — adding roughly 11 million shares over the month — holds, trims, or accelerates in the final three weeks before the print, and whether the earnings history of sharp single-day moves (the April 23 report produced a 12.5% one-day drop and a 14.3% five-day decline) shapes how aggressively options traders price the event.
See the live data behind this article on ORTEX.
Open NOW on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
