ServiceNow (NYSE:NOW) Shares Down 4.1% After Analyst Downgrade

Key Points

• ServiceNow shares fell 4.1% to $105.12 after Citigroup cut its price target from $170 to $157, though it maintained a buy rating. Trading volume was 61% above average.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $154.50, despite several firms lowering targets.
• ServiceNow reported third-quarter revenue of $4.11 billion, up 20.5% year over year and slightly above estimates, while earnings per share narrowly missed consensus expectations.

Shares of ServiceNow, Inc. (NYSE:NOW - Get Free Report) traded down 4.1% during mid-day trading on Friday after Citigroup lowered their price target on the stock from $170.00 to $157.00. Citigroup currently has a buy rating on the stock. ServiceNow traded as low as $103.51 and last traded at $105.12. 34,872,295 shares changed hands during mid-day trading, an increase of 61% from the average session volume of 21,664,039 shares. The stock had previously closed at $109.67.

NOW has been the topic of a number of other reports. Yorkville Ives started coverage on ServiceNow in a research report on Monday, October 5th. They issued an "outperform" rating and a $160.00 price objective on the stock. KeyCorp restated an "underweight" rating and set a $110.00 target price (up from $85.00) on shares of ServiceNow in a report on Thursday. Sanford C. Bernstein reaffirmed an "outperform" rating and issued a $266.00 price target on shares of ServiceNow in a research note on Tuesday, October 20th. Cantor Fitzgerald upped their target price on ServiceNow from $174.00 to $201.00 and gave the stock an "overweight" rating in a report on Monday. Finally, Weiss Ratings upgraded ServiceNow from a "hold (c-)" rating to a "hold (c)" rating in a report on Thursday, October 8th. One equities research analyst has rated the stock with a Strong Buy rating, thirty-six have given a Buy rating, three have issued a Hold rating and three have given a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus price target of $154.50.

Insider Buying and Selling

In other news, Director Paul Chamberlain sold 2,700 shares of the firm's stock in a transaction on Thursday, August 27th. The stock was sold at an average price of $135.50, for a total transaction of $365,850.00. Following the completion of the transaction, the director directly owned 43,990 shares in the company, valued at $5,960,645. This trade represents a 5.78% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Jacqueline P. Canney sold 7,847 shares of ServiceNow stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $138.00, for a total value of $1,082,886.00. Following the completion of the transaction, the insider directly owned 30,042 shares of the company's stock, valued at approximately $4,145,796. This represents a 20.71% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 14,081 shares of company stock worth $1,937,904 in the last 90 days. Insiders own 0.34% of the company's stock.

ServiceNow News Summary

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow reported third-quarter revenue of $4.11 billion, up 20.5% year over year and slightly ahead of estimates. Subscription revenue increased 21% to $3.99 billion, while management raised its 2026 AI contract-value target to $1.7 billion. NOW Q3 Earnings Lag Estimates, Revenues Rise on Subscription Growth
• Positive Sentiment: Expanded partnerships with OpenAI, HPE, and BDO Canada support ServiceNow’s strategy of embedding governed AI and workflow automation into enterprise operations. The HPE agreement includes a five-year AI-powered support-services arrangement. ServiceNow, OpenAI Expand Partnership
• Positive Sentiment: Several analysts remain bullish after the sell-off. JPMorgan raised its target to $160 and kept an overweight rating, while Piper Sandler, Wells Fargo, TD Cowen, and Oppenheimer also maintain positive ratings, although many firms reduced their targets. JPMorgan ServiceNow Price Target
• Positive Sentiment: CEO Bill McDermott reportedly purchased approximately $3 million of ServiceNow stock and argued that investors are undervaluing the company’s long-term AI opportunity. ServiceNow CEO Makes Unicorn Claim

Hedge Funds Weigh In On ServiceNow

A number of hedge funds have recently added to or reduced their stakes in the company. BlackRock Inc. bought a new stake in ServiceNow in the 2nd quarter worth about $9,536,615,000. Bank of New York Mellon Corp bought a new position in ServiceNow during the 2nd quarter valued at about $712,573,000. Legal & General Group Plc purchased a new stake in shares of ServiceNow during the 2nd quarter valued at about $641,888,000. Bank of America Corp DE bought a new stake in shares of ServiceNow in the second quarter worth approximately $627,355,000. Finally, Deutsche Bank AG bought a new stake in shares of ServiceNow in the second quarter worth approximately $595,157,000. 87.18% of the stock is currently owned by hedge funds and other institutional investors.

ServiceNow Price Performance

The stock has a market capitalization of $108.69 billion, a PE ratio of 75.63, a PEG ratio of 2.75 and a beta of 0.99. The firm's fifty day moving average price is $139.20 and its two-hundred day moving average price is $115.64. The company has a quick ratio of 0.70, a current ratio of 0.70 and a debt-to-equity ratio of 0.43.

ServiceNow (NYSE:NOW - Get Free Report) last issued its quarterly earnings data on Wednesday, October 28th. The information technology services provider reported $1.00 EPS for the quarter, missing the consensus estimate of $1.02 by ($0.02). ServiceNow had a return on equity of 15.38% and a net margin of 9.36%. The firm had revenue of $4.11 billion during the quarter, compared to the consensus estimate of $4.09 billion. During the same period in the previous year, the firm earned $4.82 EPS. The business's revenue was up 20.5% on a year-over-year basis. On average, equities analysts predict that ServiceNow, Inc. will post 2.23 earnings per share for the current year.

ServiceNow Company Profile

ServiceNow, Inc provides cloud-based software designed to help organizations digitize, automate and manage enterprise workflows. Its Now Platform connects people, processes and systems across departments, enabling customers to manage work through a centralized technology environment.

The company's products and services address a range of business needs, including information technology service management, IT operations management, customer service management, human resources service delivery, security operations, risk and compliance, and application development.

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