ServiceNow (NYSE:NOW) Shares Up 3.3% - Here's Why

Key Points

• ServiceNow shares rose 3.3% in mid-day trading, supported by a broader tech-sector rebound and AI-related partnerships with Google Cloud and Kyndryl that could expand use of its workflow platform.
• The gain follows a steep selloff: shares have fallen about 29% over the past month, amid concerns about competition from new AI tools and lingering worries after earnings.
• Recent quarterly revenue rose 20.5% year over year to $4.11 billion, slightly topping expectations, while EPS of $1.00 missed estimates. Analysts’ average price target is $154.50, though targets are estimates, not guarantees.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) shares rose 3.3% during mid-day trading on Wednesday. The company traded as high as $103.65 and last traded at $102.8520. Approximately 14,095,377 shares traded hands during mid-day trading, a decline of 35% from the average session volume of 21,538,238 shares. The stock had previously closed at $99.61.

ServiceNow News Roundup

Here's some of the latest news about NOW:

• Positive Sentiment: A tech-sector rebound is supporting NOW shares today. ServiceNow’s expanded Google Cloud partnership lets Gemini Enterprise execute business workflows, while its Kyndryl collaboration has launched an AI-powered autonomous-operations offering. Both could broaden adoption of ServiceNow’s workflow platform, though the financial payoff is not yet clear. ServiceNow’s Google Cloud partnership and AI opportunity Kyndryl partnership announcement
• Neutral Sentiment: Analysts’ average price target is reported at $154.50, well above recent trading levels, but targets are estimates and do not guarantee a recovery. Insider Jacqueline Canney’s sale of 1,289 shares was made under a pre-arranged plan to cover tax withholding on vested equity awards, which may make it less informative as a signal of her outlook. Analyst price target report Insider sale details
• Negative Sentiment: NOW has fallen about 29% over the past month, substantially more than the technology sector’s 12.6% decline. The selloff reflects worries that new AI tools, including Anthropic’s Claude products, could intensify competition for enterprise software, as well as lingering investor concerns following earnings. Recent share performance AI competition concerns

Analysts Set New Price Targets

Several brokerages recently issued reports on NOW. TD Cowen dropped their price objective on ServiceNow from $165.00 to $160.00 and set a "buy" rating on the stock in a research note on Thursday, October 29th. Jefferies Financial Group set a $145.00 price target on ServiceNow in a research note on Thursday, October 29th. Argus restated a "buy" rating and set a $170.00 target price on shares of ServiceNow in a research report on Tuesday, November 3rd. Citigroup lowered their price target on ServiceNow from $170.00 to $157.00 and set a "buy" rating on the stock in a research report on Thursday, October 29th. Finally, Canaccord Genuity Group set a $145.00 target price on ServiceNow in a research note on Thursday, October 29th. 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 assigned a Sell rating to the company. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $154.50.

ServiceNow Price Performance

The stock has a 50-day simple moving average of $134.49 and a 200 day simple moving average of $114.55. The company has a market cap of $106.76 billion, a PE ratio of 73.99, a P/E/G ratio of 2.01 and a beta of 1.00. The company has a quick ratio of 0.72, a current ratio of 0.72 and a debt-to-equity ratio of 0.42.

ServiceNow (NYSE:NOW - Get Free Report) last posted its quarterly earnings data on Wednesday, October 28th. The information technology services provider reported $1.00 earnings per share for the quarter, missing analysts' consensus estimates of $1.02 by ($0.02). ServiceNow had a return on equity of 15.17% and a net margin of 9.36%. The company had revenue of $4.11 billion for the quarter, compared to analysts' expectations of $4.09 billion. During the same period in the previous year, the business posted $4.82 EPS. The business's revenue for the quarter was up 20.5% on a year-over-year basis. Equities analysts expect that ServiceNow, Inc. will post 2.12 EPS for the current year.

Insider Transactions at ServiceNow

In related news, insider Paul Fipps sold 2,034 shares of the company's stock in a transaction on Monday, August 31st. The stock was sold at an average price of $147.87, for a total transaction of $300,767.58. Following the transaction, the insider owned 18,305 shares of the company's stock, valued at $2,706,760.35. This represents a 10.00% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, Director Paul Chamberlain sold 2,700 shares of the company'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 transaction, the director directly owned 43,990 shares in the company, valued at approximately $5,960,645. This trade represents a 5.78% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders have sold 15,370 shares of company stock worth $2,068,995. Corporate insiders own 0.34% of the company's stock.

Hedge Funds Weigh In On ServiceNow

Several hedge funds and other institutional investors have recently modified their holdings of NOW. Bank of Nova Scotia increased its stake in shares of ServiceNow by 53.3% in the 1st quarter. Bank of Nova Scotia now owns 1,018,036 shares of the information technology services provider's stock valued at $106,436,000 after purchasing an additional 353,749 shares during the last quarter. Sapient Capital LLC boosted its holdings in ServiceNow by 266.0% in the second quarter. Sapient Capital LLC now owns 77,661 shares of the information technology services provider's stock valued at $7,710,000 after acquiring an additional 56,444 shares during the last quarter. Meeder Advisory Services Inc. acquired a new stake in ServiceNow during the 2nd quarter worth about $2,881,000. Vestor Capital LLC boosted its position in shares of ServiceNow by 38,987.2% during the 1st quarter. Vestor Capital LLC now owns 122,343 shares of the information technology services provider's stock valued at $12,791,000 after purchasing an additional 122,030 shares in the last quarter. Finally, Cardano Risk Management B.V. lifted its stake in ServiceNow by 6.9% in the second quarter. Cardano Risk Management B.V. now owns 484,785 shares of the information technology services provider's stock valued at $48,129,000 after buying an additional 31,119 shares during the period. 87.18% of the stock is owned by institutional investors and hedge funds.

ServiceNow Company Profile

ServiceNow, Inc. provides cloud-based software that helps organizations manage digital workflows and automate business processes. Founded in 2004 by Fred Luddy, the company began with a focus on IT service management and has expanded its platform to support a range of enterprise operations. Its products include tools for IT service and operations management, customer service, human resources, security, and application development. ServiceNow also offers artificial intelligence capabilities, including tools designed to help organizations automate tasks and find information across workflows.

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