ServiceNow, Inc. (NYSE:NOW) Given Average Recommendation of "Moderate Buy" by Brokerages

Key Points

• Analysts remain broadly bullish: ServiceNow has a “Moderate Buy” consensus from 42 brokerages, with 36 buy ratings and an average 12-month price target of $143.39.
• Strong second-quarter results supported the outlook: Revenue rose 24% year over year to $3.99 billion, adjusted EPS beat estimates, and the company raised its full-year revenue forecast. Management also reported more than $1 billion in AI-related contract value.
• Investors face valuation and execution risks: Shares opened at $111.57, while the company trades at a roughly 69.7 price-to-earnings ratio; reported plans to eliminate up to 1,000 positions following acquisitions could improve efficiency but raise morale and integration concerns.

Shares of ServiceNow, Inc. (NYSE:NOW - Get Free Report) have been assigned an average recommendation of "Moderate Buy" from the forty-two brokerages that are currently covering the firm, MarketBeat.com reports. Three research analysts have rated the stock with a sell recommendation, two have given a hold recommendation, thirty-six have issued a buy recommendation and one has given a strong buy recommendation to the company. The average 1-year target price among analysts that have issued ratings on the stock in the last year is $143.3902.

Several research analysts have weighed in on the company. CLSA initiated coverage on ServiceNow in a research report on Monday, July 20th. They set an "underperform" rating and a $72.00 price objective on the stock. Wells Fargo & Company reduced their target price on shares of ServiceNow from $185.00 to $160.00 and set an "overweight" rating for the company in a research report on Thursday, April 23rd. Robert W. Baird upped their price target on shares of ServiceNow from $118.00 to $125.00 and gave the company an "outperform" rating in a research note on Thursday, July 23rd. TD Cowen reaffirmed a "buy" rating and set a $140.00 price target on shares of ServiceNow in a research report on Friday, July 17th. Finally, Guggenheim upgraded shares of ServiceNow from a "neutral" rating to a "buy" rating and set a $125.00 price objective for the company in a research note on Wednesday, July 1st.

More ServiceNow News

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow raised its full-year revenue outlook, reinforcing confidence in continued demand for its workflow-automation platform and supporting the recent improvement in the stock. Why Shares of ServiceNow Stock Were Rising This Week
• Positive Sentiment: Second-quarter revenue rose approximately 24% year over year to about $4 billion, while adjusted earnings exceeded expectations. Management also highlighted more than $1 billion in AI-related contract value, suggesting AI agents are adding consumption-based revenue rather than simply reducing software-seat demand. ServiceNow Stock Opinions on Q2 Earnings Results
• Positive Sentiment: Analyst commentary remains constructive, with reported price targets materially above the recent trading level. One bullish analysis raised its fair-value estimate to $160, citing accelerating user retention, strong organic growth, pricing power in AI products and a long-term target of $30 billion to $32 billion in subscription revenue. ServiceNow User Retention Is Accelerating
• Neutral Sentiment: Dynamic Lifecycle Innovations launched an IT asset-disposition application on ServiceNow, adding another example of partners expanding the platform’s use cases. The announcement is strategically supportive but is unlikely to materially change near-term revenue expectations. Dynamic Lifecycle Innovations launches new ServiceNow app
• Negative Sentiment: ServiceNow could eliminate up to 1,000 positions this year as part of a post-acquisition “rightsizing” effort. The cuts may improve efficiency and margins, but reports of continuing layoffs create execution, morale and integration concerns for investors. Exclusive: ServiceNow to cut up to 1K jobs

ServiceNow Price Performance

ServiceNow stock opened at $111.57 on Monday. ServiceNow has a 12 month low of $81.24 and a 12 month high of $196.40. The stock's 50 day moving average is $105.64 and its 200-day moving average is $106.18. The company has a current ratio of 0.70, a quick ratio of 0.70 and a debt-to-equity ratio of 0.43. The company has a market capitalization of $115.36 billion, a price-to-earnings ratio of 69.73, a PEG ratio of 1.96 and a beta of 0.94.

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

Insider Transactions at ServiceNow

In other news, Director Anita M. Sands sold 16,445 shares of ServiceNow stock in a transaction that occurred on Thursday, May 14th. The shares were sold at an average price of $90.14, for a total value of $1,482,352.30. Following the completion of the sale, the director directly owned 30,090 shares in the company, valued at approximately $2,712,312.60. The trade was a 35.34% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider Paul Fipps sold 1,048 shares of the business's stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $98.51, for a total value of $103,238.48. Following the completion of the sale, the insider owned 12,072 shares of the company's stock, valued at approximately $1,189,212.72. This trade represents a 7.99% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders have sold 19,144 shares of company stock valued at $1,730,097. 0.34% of the stock is currently owned by company insiders.

Institutional Trading of ServiceNow

Large investors have recently modified their holdings of the stock. Covenant Asset Management LLC increased its holdings in shares of ServiceNow by 169.2% during the fourth quarter. Covenant Asset Management LLC now owns 20,863 shares of the information technology services provider's stock worth $3,196,000 after buying an additional 13,114 shares in the last quarter. Norges Bank acquired a new stake in shares of ServiceNow during the 4th quarter valued at $2,020,992,000. World Investment Advisors boosted its holdings in shares of ServiceNow by 411.7% during the 4th quarter. World Investment Advisors now owns 47,955 shares of the information technology services provider's stock valued at $7,346,000 after acquiring an additional 38,583 shares in the last quarter. Moors & Cabot Inc. grew its position in ServiceNow by 387.7% during the 4th quarter. Moors & Cabot Inc. now owns 45,630 shares of the information technology services provider's stock worth $6,990,000 after acquiring an additional 36,274 shares during the last quarter. Finally, Sumitomo Mitsui Trust Group Inc. increased its holdings in ServiceNow by 385.9% in the 4th quarter. Sumitomo Mitsui Trust Group Inc. now owns 2,599,397 shares of the information technology services provider's stock worth $398,202,000 after purchasing an additional 2,064,440 shares in the last quarter. 87.18% of the stock is owned by institutional investors and hedge funds.

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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