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

Key Points

• ServiceNow shares gapped up after the open, rising from a prior close of $103.42 to an opening price of $110.14, with heavy trading volume. The move reflects renewed investor interest in the stock.
• Recent news is broadly positive: Bank of America reinstated coverage with a Buy rating and $130 price target, and ServiceNow’s partnership with Experian is being viewed as a boost to its AI-driven enterprise workflow platform.
• Despite the rebound, the stock still faces mixed signals, including insider selling and lingering concerns about AI disruption in software. Analysts remain mostly constructive overall, with a consensus Moderate Buy and average target price of $141.89.

ServiceNow, Inc. (NYSE:NOW - Get Free Report)'s stock price gapped up before the market opened on Tuesday . The stock had previously closed at $103.42, but opened at $110.14. ServiceNow shares last traded at $107.4280, with a volume of 14,794,498 shares changing hands.

ServiceNow News Roundup

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Bank of America reinstated coverage with a Buy rating and $130 price target, calling ServiceNow a likely winner from enterprise AI adoption. BofA Reinstates Coverage of ServiceNow, Salesforce. It Says 1 Is an AI Beneficiary.
• Positive Sentiment: ServiceNow’s partnership with Experian to embed data and decisioning tools into its AI platform is seen as strengthening its enterprise workflow moat and supporting autonomous AI agents. ServiceNow (NOW) Partners With Experian to Power Autonomous AI Agents With Trusted Data
• Positive Sentiment: Market commentary says software stocks are rebounding after AI disruption fears were overdone, and ServiceNow is one of the leaders in that sector-wide recovery. ServiceNow’s stock heads for best day in a year — flashing a green light for the software sector
• Neutral Sentiment: Some investors are also noting insider selling, but the latest sale was tied to a pre-arranged trading plan and tax withholding, which limits its significance. Insider Selling: ServiceNow NYSE: NOW Insider Sells 1,048 Shares of Stock
• Negative Sentiment: Despite the rebound, some reports still point to lingering AI-disruption and “SaaSpocalypse” concerns, suggesting the stock may remain volatile if the sector rally fades. ServiceNow stock flashes a death cross amid rising SaaSpocalypse concerns

Analyst Ratings Changes

NOW has been the subject of a number of recent research reports. Cantor Fitzgerald cut their price objective on ServiceNow to $122.00 and set an "overweight" rating for the company in a research report on Thursday, April 23rd. Citizens Jmp reiterated a "market outperform" rating and set a $157.00 price objective on shares of ServiceNow in a research report on Tuesday, May 5th. BNP Paribas Exane upgraded ServiceNow from a "neutral" rating to an "outperform" rating and set a $140.00 price objective for the company in a research report on Monday, March 16th. BMO Capital Markets cut their price objective on ServiceNow from $120.00 to $115.00 and set an "outperform" rating for the company in a research report on Thursday, April 23rd. Finally, Mizuho cut their price objective on ServiceNow from $150.00 to $140.00 and set an "outperform" rating for the company in a research report on Thursday, April 23rd. Two research analysts have rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average target price of $141.89.

ServiceNow Price Performance

The stock has a fifty day moving average price of $100.18 and a 200-day moving average price of $128.05. The company has a market cap of $106.22 billion, a PE ratio of 61.59, a price-to-earnings-growth ratio of 1.61 and a beta of 0.82. The company has a debt-to-equity ratio of 0.13, a current ratio of 0.84 and a quick ratio of 0.84.

ServiceNow (NYSE:NOW - Get Free Report) last released its earnings results on Wednesday, April 22nd. The information technology services provider reported $0.97 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.97. The company had revenue of $3.77 billion during the quarter, compared to analyst estimates of $3.75 billion. ServiceNow had a return on equity of 18.16% and a net margin of 12.59%.The company's revenue for the quarter was up 22.1% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.81 earnings per share. On average, equities analysts expect that ServiceNow, Inc. will post 2.35 earnings per share for the current year.

Insiders Place Their Bets

In other news, insider Jacqueline P. Canney sold 8,927 shares of the stock in a transaction on Friday, April 24th. The stock was sold at an average price of $89.60, for a total value of $799,859.20. Following the completion of the sale, the insider owned 29,531 shares in the company, valued at $2,645,977.60. This represents a 23.21% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director Anita M. Sands sold 16,445 shares of the stock in a transaction 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 owned 30,090 shares of the company's stock, valued at $2,712,312.60. The trade was a 35.34% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 41,408 shares of company stock worth $3,927,369 over the last three months. Company insiders own 0.34% of the company's stock.

Institutional Trading of ServiceNow

A number of hedge funds have recently modified their holdings of NOW. World Investment Advisors grew its position in shares of ServiceNow by 411.7% in the fourth quarter. World Investment Advisors now owns 47,955 shares of the information technology services provider's stock valued at $7,346,000 after purchasing an additional 38,583 shares during the last quarter. Cohen Klingenstein LLC grew its position in shares of ServiceNow by 400.0% in the fourth quarter. Cohen Klingenstein LLC now owns 10,000 shares of the information technology services provider's stock valued at $1,532,000 after purchasing an additional 8,000 shares during the last quarter. Sumitomo Mitsui Trust Group Inc. grew its position in shares of ServiceNow by 385.9% in the fourth quarter. Sumitomo Mitsui Trust Group Inc. now owns 2,599,397 shares of the information technology services provider's stock valued at $398,202,000 after purchasing an additional 2,064,440 shares during the last quarter. Torray Investment Partners LLC grew its position in shares of ServiceNow by 390.5% in the fourth quarter. Torray Investment Partners LLC now owns 40,629 shares of the information technology services provider's stock valued at $6,224,000 after purchasing an additional 32,345 shares during the last quarter. Finally, Jennison Associates LLC grew its position in shares of ServiceNow by 280.1% in the fourth quarter. Jennison Associates LLC now owns 8,432,389 shares of the information technology services provider's stock valued at $1,291,758,000 after purchasing an additional 6,213,762 shares during the last quarter. Hedge funds and other institutional investors own 87.18% of the company's stock.

About ServiceNow

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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