ServiceNow's (NOW) Q1 results are expected to be "solid", with strong cost management and potential upside to consensus estimates, Oppenheimer said in a note Tuesday.
However, the firm noted that rising macroeconomic and geopolitical uncertainties are likely to slow purchasing behavior across enterprise IT and the Federal business, which could negatively affect ServiceNow's guidance.
Oppenheimer also pointed out that the Federal exposure remains a challenge for ServiceNow, citing weaker-than-expected Federal obligations for Q1, which may impact booking results and second-quarter guidance.
Despite these challenges, Oppenheimer expects the upcoming earnings report to highlight the company's strong generative AI adoption, healthy margins, and solid fundamentals.
The investment bank predicts ServiceNow will report revenue of about $3.08 billion, an 18.5% year-over-year increase, and adjusted earnings per share of $3.83 when it releases Q1 results on April 23.
Oppenheimer reiterated its outperform rating on ServiceNow, while lowering its price target to $970 from $1,200.
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