ServiceNow (NYSE:NOW) Trading 6.5% Higher on Analyst Upgrade

Key Points

• ServiceNow shares rose 6.5% after Bank of America raised its price target from $130 to $150 and maintained a Buy rating.
• Analyst sentiment remains broadly positive, with 36 Buy ratings and an average price target of $144.24, though CLSA issued an Underperform rating with a $72 target.
• ServiceNow recently exceeded quarterly earnings and revenue expectations, reporting $0.90 in EPS and $3.99 billion in revenue, up 24% year over year; risks include AI-driven pressure on software pricing and a recent minor insider sale.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) shares rose 6.5% on Wednesday after Bank of America raised their price target on the stock from $130.00 to $150.00. Bank of America currently has a buy rating on the stock. ServiceNow traded as high as $129.60 and last traded at $127.2150. Approximately 22,399,707 shares traded hands during trading, a decline of 6% from the average session volume of 23,744,471 shares. The stock had previously closed at $119.49.

A number of other research analysts have also recently weighed in on NOW. BMO Capital Markets boosted their target price on shares of ServiceNow from $115.00 to $118.00 and gave the company an "outperform" rating in a research note on Thursday, July 23rd. Canaccord Genuity Group dropped their price objective on ServiceNow from $200.00 to $145.00 and set a "buy" rating on the stock in a research note on Thursday, April 23rd. JPMorgan Chase & Co. raised their target price on ServiceNow from $145.00 to $150.00 and gave the stock an "overweight" rating in a research report on Thursday, July 23rd. Jefferies Financial Group restated a "buy" rating and issued a $140.00 target price (up from $135.00) on shares of ServiceNow in a research note on Thursday, July 23rd. Finally, CLSA initiated coverage on ServiceNow in a research note on Monday, July 20th. They issued an "underperform" rating and a $72.00 target price on the stock. One analyst has rated the stock with a Strong Buy rating, thirty-six have assigned a Buy rating, two have assigned a Hold rating and three have issued a Sell rating to the company's stock. According to MarketBeat.com, ServiceNow currently has an average rating of "Moderate Buy" and an average price target of $144.24.

Insider Activity at ServiceNow

In related news, Director Paul Edward Chamberlain sold 1,500 shares of the firm's stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $125.60, for a total value of $188,400.00. Following the completion of the transaction, the director directly owned 46,690 shares of the company's stock, valued at approximately $5,864,264. This trade represents a 3.11% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 0.34% of the company's stock.

ServiceNow News Roundup

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Higher analyst conviction supports the stock. Bank of America’s bullish rating and higher target follow TD Cowen’s reaffirmed Buy rating and reflect optimism about ServiceNow’s recurring-revenue model, AI workflow opportunities and expanding security business. TD Cowen Buy rating
• Positive Sentiment: Armis expands ServiceNow’s cybersecurity opportunity. Coverage of the approximately $8 billion acquisition highlights how the deal could strengthen ServiceNow’s AI-powered security platform and broaden its preventive cyber-defense offerings, potentially supporting long-term growth and cross-selling. ServiceNow Armis acquisition
• Positive Sentiment: Some investors view the software selloff as excessive. Jim Cramer argued that profitable, growing enterprise software companies such as ServiceNow are being valued as if AI will eliminate their business models, rather than merely pressure growth or pricing. Jim Cramer defends software companies
• Neutral Sentiment: New ecosystem partnerships add product momentum. Tribal launched an offering for ServiceNow that enables enterprise teams to build and manage AI agents on the Now Platform, potentially increasing platform usage but with uncertain near-term financial impact. Tribal ServiceNow partnership
• Negative Sentiment: AI-related business-model risks remain. Critics warn that AI could allow companies to accomplish more with fewer employees, potentially challenging per-seat software pricing and subscription growth. The Armis transaction also creates integration and execution risks. AI threat to software business models
• Negative Sentiment: Insider selling is a minor overhang. Director Paul Edward Chamberlain sold 1,500 shares under a pre-arranged Rule 10b5-1 plan. Because the sale was scheduled in advance and reduced his holdings by only 3.11%, it offers limited evidence of deteriorating fundamentals. ServiceNow director stock sale

Hedge Funds Weigh In On ServiceNow

Large investors have recently made changes to their positions in the stock. Millstone Evans Group LLC grew its holdings in ServiceNow by 400.0% during the 4th quarter. Millstone Evans Group LLC now owns 165 shares of the information technology services provider's stock valued at $25,000 after buying an additional 132 shares in the last quarter. CBIZ Investment Advisory Services LLC increased its holdings in ServiceNow by 540.0% during the 4th quarter. CBIZ Investment Advisory Services LLC now owns 160 shares of the information technology services provider's stock worth $25,000 after acquiring an additional 135 shares during the period. Blueline Advisors LLC bought a new stake in ServiceNow during the 4th quarter worth approximately $25,000. Measured Wealth Private Client Group LLC lifted its stake in ServiceNow by 560.0% in the 4th quarter. Measured Wealth Private Client Group LLC now owns 165 shares of the information technology services provider's stock worth $25,000 after purchasing an additional 140 shares in the last quarter. Finally, Wealth Watch Advisors INC lifted its stake in ServiceNow by 432.3% in the 4th quarter. Wealth Watch Advisors INC now owns 165 shares of the information technology services provider's stock worth $25,000 after purchasing an additional 134 shares in the last quarter. 87.18% of the stock is owned by institutional investors.

ServiceNow Stock Performance

The company's fifty day simple moving average is $107.40 and its 200 day simple moving average is $105.41. 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 stock has a market capitalization of $131.54 billion, a P/E ratio of 79.51, a P/E/G ratio of 2.18 and a beta of 0.94.

ServiceNow (NYSE:NOW - Get Free Report) last released its quarterly earnings results on Wednesday, July 22nd. The information technology services provider reported $0.90 earnings per share for the quarter, topping the consensus estimate of $0.86 by $0.04. ServiceNow had a net margin of 11.34% and a return on equity of 16.45%. The firm had revenue of $3.99 billion for the quarter, compared to analysts' expectations of $3.93 billion. During the same quarter in the prior year, the firm posted $0.81 earnings per share. The business's quarterly revenue was up 24.0% on a year-over-year basis. As a group, sell-side analysts forecast that ServiceNow, Inc. will post 2.24 earnings per share for the current fiscal year.

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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