ServiceNow (NYSE:NOW) Stock Price Down 4.5% - Here's What Happened

Key Points

• ServiceNow shares fell 4.5% in midday trading, dropping as low as $89.39 after closing at $93.80 the prior session. Trading volume was below average, suggesting the move came on lighter-than-normal activity.
• The company’s recent updates remain broadly positive, including deeper AI partnerships with Google Cloud and HCLTech and analyst commentary pointing to strong pricing power, high margins, and steady revenue growth. These themes suggest the long-term business outlook is still viewed favorably despite the stock weakness.
• Wall Street remains constructive overall, with several firms reiterating Buy/Outperform ratings and a consensus price target of $142.17. Even so, the stock has been pressured by concerns about AI disruption in enterprise software and whether near-term upside is already priced in.

ServiceNow, Inc. (NYSE:NOW - Get Free Report)'s share price fell 4.5% during mid-day trading on Thursday . The company traded as low as $89.39 and last traded at $89.5890. 20,757,962 shares traded hands during trading, a decline of 14% from the average daily volume of 24,149,221 shares. The stock had previously closed at $93.80.

ServiceNow News Roundup

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow continues to add strategic AI-related partnerships, including deeper collaboration with Google Cloud and HCLTech, which could expand enterprise AI agent use cases and reinforce demand for its workflow platform.
• Positive Sentiment: Analysts remain constructive on the business, with coverage highlighting ServiceNow’s pricing power and high-margin growth potential, and another note calling the company an excellent business trading at a discount.
• Positive Sentiment: Recent commentary also emphasized ServiceNow’s steady revenue growth versus peers, supporting the view that its operating momentum remains intact even as broader software stocks have been volatile.
• Neutral Sentiment: ServiceNow remains a high-profile stock with elevated investor attention, which can keep trading active but does not by itself change the fundamentals.
• Negative Sentiment: The stock has also been weighed down by broader concerns about AI disruption to enterprise software and by a recent dip versus the broader market, suggesting investors are still questioning how much near-term upside is already priced in.

Wall Street Analyst Weigh In

Several brokerages have commented on NOW. UBS Group restated an "outperform" rating on shares of ServiceNow in a research note on Tuesday, May 26th. Cantor Fitzgerald set a $130.00 price objective on ServiceNow in a report on Monday, June 15th. TD Cowen restated a "buy" rating and issued a $140.00 target price on shares of ServiceNow in a research report on Thursday, April 23rd. HSBC reduced their price target on ServiceNow from $226.00 to $171.00 and set a "buy" rating for the company in a research report on Thursday, April 16th. Finally, Evercore increased their price target on ServiceNow from $140.00 to $150.00 and gave the stock an "outperform" rating in a research note on Tuesday, May 5th. One research analyst has rated the stock with a Strong Buy rating, thirty-five have given a Buy rating, five have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, ServiceNow currently has an average rating of "Moderate Buy" and a consensus price target of $142.17.

ServiceNow Price Performance

The company has a 50 day moving average of $99.98 and a two-hundred day moving average of $115.96. The firm has a market cap of $92.37 billion, a P/E ratio of 53.39, a PEG ratio of 1.60 and a beta of 0.94. The company has a quick ratio of 0.84, a current ratio of 0.84 and a debt-to-equity ratio of 0.13.

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, hitting the consensus estimate of $0.97. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The firm had revenue of $3.77 billion for the quarter, compared to analysts' expectations of $3.75 billion. During the same period in the previous year, the business earned $0.81 earnings per share. ServiceNow's revenue for the quarter was up 22.1% compared to the same quarter last year. Sell-side analysts expect that ServiceNow, Inc. will post 2.34 EPS for the current year.

Insider Buying and Selling at ServiceNow

In related news, insider Jacqueline P. Canney sold 8,927 shares of the firm's stock in a transaction that occurred on Friday, April 24th. The shares were sold at an average price of $89.60, for a total transaction of $799,859.20. Following the completion of the sale, the insider directly owned 29,531 shares in the company, valued at approximately $2,645,977.60. This trade represents a 23.21% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at the SEC website. Also, Director Paul Edward Chamberlain sold 1,500 shares of ServiceNow stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $87.23, for a total transaction of $130,845.00. Following the completion of the transaction, the director owned 44,930 shares in the company, valued at approximately $3,919,243.90. This trade represents a 3.23% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 28,071 shares of company stock worth $2,529,956. 0.34% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On ServiceNow

A number of institutional investors and hedge funds have recently modified their holdings of NOW. Vanguard Group Inc. boosted its holdings in shares of ServiceNow by 404.5% during the fourth quarter. Vanguard Group Inc. now owns 101,963,384 shares of the information technology services provider's stock worth $15,619,771,000 after purchasing an additional 81,752,460 shares during the period. State Street Corp boosted its stake in shares of ServiceNow by 406.6% during the 4th quarter. State Street Corp now owns 47,896,597 shares of the information technology services provider's stock valued at $7,337,280,000 after buying an additional 38,441,898 shares during the period. Price T Rowe Associates Inc. MD boosted its stake in shares of ServiceNow by 371.0% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 32,395,663 shares of the information technology services provider's stock valued at $4,962,692,000 after buying an additional 25,517,218 shares during the period. Geode Capital Management LLC grew its holdings in shares of ServiceNow by 404.8% during the 4th quarter. Geode Capital Management LLC now owns 23,512,428 shares of the information technology services provider's stock valued at $3,591,425,000 after acquiring an additional 18,854,775 shares in the last quarter. Finally, Morgan Stanley increased its stake in shares of ServiceNow by 335.6% in the fourth quarter. Morgan Stanley now owns 22,733,483 shares of the information technology services provider's stock worth $3,482,543,000 after acquiring an additional 17,514,679 shares during the last quarter. Institutional investors and hedge funds 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.

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.