ServiceNow (NYSE:NOW) Stock Price Down 3.5% After Analyst Downgrade

Key Points

• ServiceNow shares fell 3.5% after Citic Securities cut its price target from $168 to $140, though the firm kept a buy rating. The stock traded as low as $98.11 amid heavier-than-usual volume.
• Despite the pullback, Wall Street remains generally constructive on the name, with multiple firms still rating it a buy or overweight. The consensus target price is $141.85, and MarketBeat shows an average rating of Moderate Buy.
• Recent insider activity was negative, as Director Anita M. Sands and insider Paul Fipps both sold shares, and insiders sold 31,767 shares over the last 90 days. Even so, institutional investors still own 87.18% of the stock.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) dropped 3.5% during trading on Thursday after Citic Securities lowered their price target on the stock from $168.00 to $140.00. Citic Securities currently has a buy rating on the stock. ServiceNow traded as low as $98.11 and last traded at $99.7020. Approximately 25,763,489 shares changed hands during mid-day trading, an increase of 15% from the average daily volume of 22,429,227 shares. The stock had previously closed at $103.30.

Several other research firms have also recently commented on NOW. HSBC dropped their target price on ServiceNow from $226.00 to $171.00 and set a "buy" rating on the stock in a research report on Thursday, April 16th. Stifel Nicolaus reduced their price target on ServiceNow from $135.00 to $120.00 and set a "buy" rating for the company in a research report on Thursday, April 23rd. BNP Paribas Exane upgraded shares of ServiceNow from a "neutral" rating to an "outperform" rating and set a $140.00 price objective on the stock in a report on Monday, March 16th. The Goldman Sachs Group cut their price objective on shares of ServiceNow from $188.00 to $163.00 and set a "buy" rating on the stock in a research report on Thursday, April 23rd. Finally, Barclays restated an "overweight" rating and set a $134.00 target price (up from $132.00) on shares of ServiceNow in a report on Tuesday, May 5th. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, six have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $141.85.

Insider Buying and Selling at ServiceNow

In related news, Director Anita M. Sands sold 16,445 shares of the business's stock in a transaction that occurred on Thursday, May 14th. The stock was 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 sale was disclosed in a filing with the SEC, which is accessible through this link. Also, insider Paul Fipps sold 3,696 shares of the firm's stock in a transaction on Monday, February 23rd. The stock was sold at an average price of $101.77, for a total value of $376,141.92. Following the transaction, the insider owned 8,061 shares in the company, valued at approximately $820,367.97. This trade represents a 31.44% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 31,767 shares of company stock valued at $2,906,098 over the last ninety days. Company insiders own 0.34% of the company's stock.

Key Stories Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: New reports say ServiceNow’s rally is being driven by its broader AI strategy, including fresh AI products and renewed analyst support. One update noted the stock had already gained nearly 9% on the news. ServiceNow Rally Builds Around Broader AI Strategy
• Positive Sentiment: Wall Street coverage remains constructive, with BofA restarting ServiceNow with a Buy rating and Citic Securities also maintaining a Buy even after cutting its price target to $140 from $168. Citic Securities price target update
• Positive Sentiment: Several articles frame ServiceNow as a beneficiary of “agentic AI,” arguing the company could become a control center for enterprise automation rather than a casualty of AI disruption. Wall Street Is Warming Up to ServiceNow Stock
• Neutral Sentiment: A ServiceNow partner, IntegrityPro Consulting, announced AI jobs tied to West Palm Beach, which supports the ecosystem story but is unlikely to move the stock on its own. ServiceNow partner IntegrityPro Consulting brings AI jobs to West Palm
• Negative Sentiment: Despite the positive AI narrative, recent valuation-focused commentary still highlights that ServiceNow has fallen sharply over the past year, showing investors remain sensitive to rich multiples and prior share-price declines. Assessing ServiceNow (NOW) Valuation After A Year Of Sharp Share Price Declines

Institutional Investors Weigh In On ServiceNow

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. World Investment Advisors lifted 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 worth $7,346,000 after buying an additional 38,583 shares in the last quarter. Cohen Klingenstein LLC grew its holdings in ServiceNow by 400.0% during the 4th quarter. Cohen Klingenstein LLC now owns 10,000 shares of the information technology services provider's stock valued at $1,532,000 after buying an additional 8,000 shares in the last quarter. Sumitomo Mitsui Trust Group Inc. increased its stake 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 acquiring an additional 2,064,440 shares during the last quarter. Torray Investment Partners LLC increased its stake in ServiceNow by 390.5% in the 4th quarter. Torray Investment Partners LLC now owns 40,629 shares of the information technology services provider's stock worth $6,224,000 after acquiring an additional 32,345 shares during the last quarter. Finally, Jennison Associates LLC raised its holdings in shares of ServiceNow by 280.1% during the 4th quarter. Jennison Associates LLC now owns 8,432,389 shares of the information technology services provider's stock worth $1,291,758,000 after acquiring an additional 6,213,762 shares in the last quarter. 87.18% of the stock is currently owned by institutional investors.

ServiceNow Trading Down 3.5%

The company has a market cap of $102.79 billion, a PE ratio of 59.42, a price-to-earnings-growth ratio of 1.85 and a beta of 0.82. The company has a 50-day moving average of $99.35 and a 200 day moving average of $126.89. 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 issued its quarterly earnings results on Wednesday, April 22nd. The information technology services provider reported $0.97 EPS for the quarter, meeting the consensus estimate of $0.97. The company had revenue of $3.77 billion for the quarter, compared to the consensus estimate of $3.75 billion. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The firm's revenue was up 22.1% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.81 EPS. Analysts predict that ServiceNow, Inc. will post 2.35 earnings per share for the current year.

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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