ServiceNow enters the post-earnings week with shorts still adding pressure and options traders quietly stepping back from the bullish conviction that defined the run into May 21.
Short interest has kept climbing since the earnings print. At 25.1% of the free float — up 74% over the past month — the position is now more than double what it was in late April, when it sat near 14%. The week-on-week increase of 3.8% shows no sign of covering, with the most recent day adding another 177,000 shares borrowed. For context, the pre-earnings note flagged a short build that looked deliberate rather than distressed. That characterisation held: the lending market remains loose, with availability at 3,219% — roughly 32 shares available to borrow for every one currently borrowed. Cost to borrow has ticked up 48% this week to 0.55%, but at that absolute level it remains negligible. There is no squeeze pressure here — the build is conviction-driven, not a borrow constraint.
Options positioning has rotated since the earnings note. The put/call ratio, which touched near 52-week lows in call-skew territory ahead of the May 21 print, has drifted back toward its recent average. At 0.73, the PCR is marginally below its 20-day mean of 0.74 and barely half a standard deviation from it — a neutral read. The 52-week high of 1.17 puts current positioning firmly in the middle of the range. The bullish call fever that preceded earnings has faded; what remains is an essentially balanced book.
The earnings results that drove this shift left a visible mark. NOW fell 1.1% the day after the May 21 print — modest in isolation, but that came after a 12.5% one-day drop on April 23 and a 15.3% decline on April 22 from separate events in the spring. Taken together, the recent reaction history runs decidedly negative, with the stock losing ground on three of the four most recent earnings-adjacent moves and shedding 14–15% across multi-day windows in the worst cases. The bear case in the analyst community centres on the $207M CRPO shortfall versus seasonal norms — the steepest sequential decline on record — and a 72% year-on-year collapse in Federal Government contract obligations. Those concerns are live and appear to be what shorts are leaning into.
The Street is split. B of A Securities reinstated with a Buy and a $130 target on May 18 — close to the current price of $99.92, leaving modest implied upside. The broader analyst distribution ranges from Macquarie's $109 Neutral to DA Davidson's $190 Buy, with the consensus mean near $142. That gap between the current level and mean target implies meaningful upside on paper, but the wide dispersion between the bulls and the neutrals reflects genuine uncertainty about the pace of recovery in Federal and enterprise CRPO. Factor scores add nuance: EV/EBIT ranks in just the 16th percentile of the universe, confirming the valuation looks stretched relative to current earnings delivery. The ORTEX short score has ticked up each day this week to 37.5, a multi-week high, consistent with the slow drip of short accumulation. Among peers, WDAY dropped 3.2% on the day and 3.8% on the week, and ADBE fell 1.7% daily and 5.9% on the week — the sector is under pressure broadly, though CRM and FRSH have been notably more resilient, down less than 0.5% over the same week.
The next scheduled catalyst is the Q3 earnings call on July 22 — eight weeks away. Between now and then, the key question is whether the CRPO trajectory stabilises or whether Federal contract attrition accelerates into summer.
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