ServiceNow (NYSE:NOW) Shares Up 3.4% - Time to Buy?

Key Points

• ServiceNow shares rose 3.4% to about $134.31, supported by optimism that the company will benefit from growing enterprise AI adoption and strong AI-related contract activity.
• Wall Street remains broadly positive, with a “Moderate Buy” consensus rating and an average price target of $147; several analysts recently raised their targets as high as $170.
• Key risks include ServiceNow’s elevated valuation, potential AI competition and execution concerns, as well as recently disclosed critical platform vulnerabilities that required customer patching.

ServiceNow, Inc. (NYSE:NOW - Get Free Report)'s stock price traded up 3.4% during mid-day trading on Wednesday. The company traded as high as $135.08 and last traded at $134.3090. 8,964,147 shares were traded during mid-day trading, a decline of 60% from the average session volume of 22,276,039 shares. The stock had previously closed at $129.94.

ServiceNow News Summary

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: NVIDIA CEO Jensen Huang said ServiceNow is “destined to be the best platform” for enterprise AI, reinforcing the view that ServiceNow could be a major beneficiary as businesses adopt AI-powered workflows. This AI Stock May Be the Biggest Winner as Enterprise AI Takes Off
• Positive Sentiment: Recent company materials reportedly showed more than $1 billion in annual contract value tied to AI, along with strong growth in new AI contracts. Partnership announcements and products such as Platform Copilot are adding to the investment case for ServiceNow’s enterprise AI platform. Dyna Software Announces the General Availability of Platform Copilot
• Positive Sentiment: Analysts remain supportive, with several firms recently raising price targets, including targets of $155 from Deutsche Bank and Needham and $170 from BTIG. Coverage also highlights strong underlying fundamentals and ServiceNow’s embedded position in corporate support and integration workflows. Why It’s Time to Load Up on ServiceNow Stock
• Neutral Sentiment: The broader software sector received a relief bid after reports of a Federal Trade Commission probe into frontier AI companies, helping investors revisit software stocks that had been pressured by concerns about AI disruption and Meta’s enterprise AI push. ServiceNow Stock Rises Wednesday: What’s Happening?
• Negative Sentiment: ServiceNow faces valuation and execution risks. Investors remain concerned about delayed deal activity, possible AI competition and whether future AI revenue growth can justify the stock’s premium multiple. ServiceNow Stock May Be Fully Priced On AI Security Flaws
• Negative Sentiment: Recent disclosures of critical AI-platform vulnerabilities, including a severe SQL-injection flaw, required customers to install patches and could create reputational and retention risks despite a new security partnership with Reco. ServiceNow Urges Immediate Patching After Critical AI Platform Flaws

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on the company. Robert W. Baird increased their price target on ServiceNow from $118.00 to $125.00 and gave the stock an "outperform" rating in a research note on Thursday, July 23rd. BTIG Research increased their target price on shares of ServiceNow from $150.00 to $170.00 and gave the stock a "buy" rating in a research report on Tuesday, September 8th. KeyCorp reiterated an "underweight" rating on shares of ServiceNow in a research note on Tuesday, July 21st. Royal Bank Of Canada restated an "outperform" rating and set a $130.00 price target on shares of ServiceNow in a research note on Thursday, July 23rd. Finally, Jefferies Financial Group reaffirmed a "buy" rating and issued a $140.00 price objective (up from $135.00) on shares of ServiceNow in a report on Thursday, July 23rd. One research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, three have assigned a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, ServiceNow currently has an average rating of "Moderate Buy" and a consensus target price of $147.00.

ServiceNow Trading Up 3.4%

The company has a debt-to-equity ratio of 0.43, a current ratio of 0.70 and a quick ratio of 0.70. The stock has a market cap of $138.88 billion, a P/E ratio of 83.94, a PEG ratio of 2.41 and a beta of 0.97. The firm's fifty day moving average price is $127.68 and its two-hundred day moving average price is $111.01.

ServiceNow (NYSE:NOW - Get Free Report) last posted its earnings results on Wednesday, July 22nd. The information technology services provider reported $0.90 EPS for the quarter, topping the consensus estimate 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 during the quarter, compared to analysts' expectations of $3.93 billion. During the same period in the previous year, the business earned $0.81 earnings per share. The firm's revenue was up 24.0% on a year-over-year basis. As a group, equities research analysts forecast that ServiceNow, Inc. will post 2.22 EPS for the current year.

Insider Activity at ServiceNow

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

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of NOW. BlackRock Inc. bought a new position in ServiceNow in the second quarter worth about $9,536,615,000. State Street Corp boosted its position in shares of ServiceNow by 2.0% in the 2nd quarter. State Street Corp now owns 49,038,218 shares of the information technology services provider's stock worth $4,868,514,000 after purchasing an additional 979,726 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its stake in shares of ServiceNow by 16.6% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 16,638,071 shares of the information technology services provider's stock worth $1,651,828,000 after buying an additional 2,362,606 shares during the last quarter. Amundi grew its stake in shares of ServiceNow by 60.9% in the 1st quarter. Amundi now owns 11,479,098 shares of the information technology services provider's stock worth $1,200,140,000 after buying an additional 4,346,722 shares during the last quarter. Finally, Capital International Investors increased its position in ServiceNow by 396.0% during the 4th quarter. Capital International Investors now owns 10,393,373 shares of the information technology services provider's stock valued at $1,592,310,000 after buying an additional 8,297,818 shares in the last quarter. Hedge funds and other institutional investors own 87.18% of the company's stock.

About ServiceNow

ServiceNow, Inc is a cloud-based enterprise software company that helps organizations digitize, automate and manage workflows. Its platform connects people, processes and systems across departments, enabling businesses to replace manual, disconnected activities with standardized digital workflows.

The company's products and services support a range of functions, including information technology service management, IT operations management, customer service, human resources, risk and security operations, and software development.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.