ServiceNow (NYSE:NOW) Shares Gap Down - What's Next?

Key Points

• ServiceNow shares fell sharply at the open, dropping from a $127.00 close to $122.33 before recovering slightly to about $124.59.
• Analysts remain broadly positive, with a MarketBeat consensus rating of “Moderate Buy” from 42 analysts and an average price target of $144.24, despite varied individual targets.
• ServiceNow exceeded quarterly expectations, reporting $0.90 in earnings per share and $3.99 billion in revenue, with revenue up 24% year over year.

Shares of ServiceNow, Inc. (NYSE:NOW - Get Free Report) gapped down prior to trading on Wednesday . The stock had previously closed at $127.00, but opened at $122.33. ServiceNow shares last traded at $124.5890, with a volume of 2,590,864 shares trading hands.

Analyst Ratings Changes

A number of analysts recently weighed in on NOW shares. Needham & Company LLC reaffirmed a "buy" rating and set a $115.00 target price on shares of ServiceNow in a report on Thursday, July 23rd. Sanford C. Bernstein restated an "outperform" rating and set a $248.00 price target (up from $236.00) on shares of ServiceNow in a research report on Thursday, July 23rd. UBS Group set a $248.00 price objective on ServiceNow in a research report on Thursday, July 23rd. Bank of America lifted their price objective on ServiceNow from $130.00 to $150.00 and gave the company a "buy" rating in a research note on Wednesday, August 19th. Finally, Wells Fargo & Company restated an "overweight" rating and set a $175.00 target price (up from $160.00) on shares of ServiceNow in a research report on Wednesday, August 12th. One investment analyst has rated the stock with a Strong Buy rating, thirty-six have given a Buy rating, three have issued a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $144.24.

ServiceNow Price Performance

The company has a market capitalization of $128.65 billion, a PE ratio of 77.76, a price-to-earnings-growth ratio of 2.25 and a beta of 0.94. The company has a quick ratio of 0.70, a current ratio of 0.70 and a debt-to-equity ratio of 0.43. The firm's 50-day moving average is $109.87 and its 200-day moving average is $105.90.

ServiceNow (NYSE:NOW - Get Free Report) last released its quarterly earnings results on Wednesday, July 22nd. The information technology services provider reported $0.90 earnings per share for the quarter, beating analysts' consensus estimates of $0.86 by $0.04. ServiceNow had a return on equity of 16.45% and a net margin of 11.34%.The business had revenue of $3.99 billion for the quarter, compared to the consensus estimate of $3.93 billion. During the same quarter last year, the business posted $0.81 earnings per share. The company's revenue for the quarter was up 24.0% on a year-over-year basis. Equities analysts predict that ServiceNow, Inc. will post 2.24 earnings per share for the current fiscal year.

Insider Activity at ServiceNow

In related news, Director Paul Edward Chamberlain sold 1,500 shares of the firm's stock in a transaction dated Thursday, August 13th. The stock was sold at an average price of $125.60, for a total transaction of $188,400.00. Following the transaction, the director directly owned 46,690 shares of the company's stock, valued at approximately $5,864,264. This trade represents a 3.11% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.34% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of NOW. Wealth Watch Advisors INC purchased a new position in ServiceNow in the 3rd quarter worth $29,000. Kelleher Financial Advisors purchased a new position in shares of ServiceNow during the third quarter valued at approximately $50,000. Pin Oak Investment Advisors Inc. raised its holdings in ServiceNow by 20.7% in the 3rd quarter. Pin Oak Investment Advisors Inc. now owns 134 shares of the information technology services provider's stock worth $123,000 after purchasing an additional 23 shares in the last quarter. Jupiter Wealth Management LLC bought a new position in ServiceNow in the second quarter worth about $154,000. Finally, CBIZ Investment Advisory Services LLC lifted its stake in shares of ServiceNow by 540.0% in the 4th quarter. CBIZ Investment Advisory Services LLC now owns 160 shares of the information technology services provider's stock valued at $25,000 after purchasing an additional 135 shares during the period. 87.18% of the stock is currently owned by institutional investors.

ServiceNow Company Profile

ServiceNow NYSE: NOW is a cloud computing company that builds enterprise software to manage digital workflows and automate business processes. Its offerings are designed to replace manual work and legacy systems with cloud-based, service-oriented applications that support IT operations, customer service, human resources, security response and other enterprise functions.

The company's flagship product family is the Now Platform, a suite of subscription software and platform services that includes IT Service Management (ITSM), IT Operations Management (ITOM), IT Business Management (ITBM), Customer Service Management (CSM), HR Service Delivery, Security Operations and Asset Management.

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