ServiceNow (NYSE:NOW) Trading Down 2.3% - Here's What Happened

Key Points

• ServiceNow shares fell 2.3% on Wednesday, trading as low as $93.42 after closing at $95.94 the prior day, with volume below its average session level.
• Despite the pullback, analysts remain broadly bullish: several firms reiterated buy/outperform ratings, and the consensus rating is “Moderate Buy” with an average target price of $142.17.
• The company’s latest quarter showed solid fundamentals, with EPS of $0.97 in line with estimates and revenue of $3.77 billion, up 22.1% year over year.

Shares of ServiceNow, Inc. (NYSE:NOW - Get Free Report) fell 2.3% during trading on Wednesday . The company traded as low as $93.42 and last traded at $93.7350. 16,908,844 shares changed hands during trading, a decline of 30% from the average session volume of 24,174,344 shares. The stock had previously closed at $95.94.

More ServiceNow News

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Wall Street commentary remains constructive, with reports highlighting ServiceNow’s pricing power and analysts still seeing significant upside from current levels, which supports the idea that the recent weakness may be a buying opportunity.
• Positive Sentiment: ServiceNow continues to expand its AI and workflow ecosystem through new partnerships, including efforts around AI governance, public sector modernization, and secure enterprise workflows, reinforcing its long-term growth story.
• Positive Sentiment: Coverage focused on ServiceNow as a trending stock suggests increased trader and investor attention, which can help fuel short-term momentum.
• Neutral Sentiment: Recent articles comparing ServiceNow with other enterprise software leaders and explaining how to invest in the stock are mostly informational, with limited direct impact on fundamentals.
• Negative Sentiment: AI-related concerns are still weighing on the name, as investors worry that advances in AI could disrupt parts of the enterprise software market and pressure valuations.
• Negative Sentiment: The stock has also been under pressure following a broader selloff in beaten-down software shares, so some of the rebound may reflect sector rotation rather than a clear company-specific improvement.

Analysts Set New Price Targets

A number of research analysts recently weighed in on NOW shares. Oppenheimer reaffirmed an "outperform" rating on shares of ServiceNow in a research note on Tuesday, May 26th. The Goldman Sachs Group reduced their target price on ServiceNow from $188.00 to $163.00 and set a "buy" rating for the company in a report on Thursday, April 23rd. TD Cowen reaffirmed a "buy" rating and issued a $140.00 price target on shares of ServiceNow in a research note on Thursday, April 23rd. Sanford C. Bernstein reiterated an "outperform" rating and set a $236.00 price target (up from $226.00) on shares of ServiceNow in a research report on Wednesday, May 6th. Finally, Morgan Stanley reduced their price objective on ServiceNow from $210.00 to $180.00 and set an "overweight" rating for the company in a research note on Thursday, April 23rd. One investment analyst has rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating, five have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, ServiceNow presently has an average rating of "Moderate Buy" and a consensus target price of $142.17.

ServiceNow Stock Performance

The stock has a market cap of $96.64 billion, a price-to-earnings ratio of 55.86, a PEG ratio of 1.55 and a beta of 0.94. The company has a debt-to-equity ratio of 0.13, a current ratio of 0.84 and a quick ratio of 0.84. The firm has a fifty day moving average of $99.89 and a 200 day moving average of $116.48.

ServiceNow (NYSE:NOW - Get Free Report) last released its quarterly earnings data on Wednesday, April 22nd. The information technology services provider reported $0.97 earnings per share for the quarter, hitting analysts' consensus estimates of $0.97. ServiceNow had a return on equity of 18.16% and a net margin of 12.59%.The company had revenue of $3.77 billion for the quarter, compared to analyst estimates of $3.75 billion. During the same quarter in the previous year, the company posted $0.81 earnings per share. The firm's revenue for the quarter was up 22.1% compared to the same quarter last year. As a group, sell-side analysts forecast that ServiceNow, Inc. will post 2.34 EPS for the current year.

Insider Activity

In other news, insider Paul Fipps sold 1,048 shares of ServiceNow stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $98.51, for a total transaction of $103,238.48. Following the sale, the insider owned 12,072 shares of the company's stock, valued at approximately $1,189,212.72. The trade was a 7.99% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. 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. Also, Director Paul Edward Chamberlain sold 1,500 shares of the firm's stock in a transaction on Thursday, May 14th. The stock was sold at an average price of $87.23, for a total value of $130,845.00. Following the sale, the director directly owned 44,930 shares of the company's stock, valued at approximately $3,919,243.90. This trade represents a 3.23% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 28,071 shares of company stock worth $2,529,956. Company insiders own 0.34% of the company's stock.

Institutional Trading of ServiceNow

A number of hedge funds and other institutional investors have recently modified their holdings of NOW. Brighton Jones LLC lifted its holdings in shares of ServiceNow by 1.1% in the 4th quarter. Brighton Jones LLC now owns 2,753 shares of the information technology services provider's stock worth $2,919,000 after acquiring an additional 30 shares during the last quarter. Sivia Capital Partners LLC lifted its stake in ServiceNow by 4.2% during the second quarter. Sivia Capital Partners LLC now owns 837 shares of the information technology services provider's stock worth $861,000 after purchasing an additional 34 shares in the last quarter. United Bank lifted its stake in ServiceNow by 15.5% during the second quarter. United Bank now owns 1,519 shares of the information technology services provider's stock worth $1,562,000 after purchasing an additional 204 shares in the last quarter. Riggs Asset Managment Co. Inc. grew its stake in shares of ServiceNow by 2.2% in the second quarter. Riggs Asset Managment Co. Inc. now owns 1,922 shares of the information technology services provider's stock valued at $1,976,000 after buying an additional 42 shares in the last quarter. Finally, Nebula Research & Development LLC raised its holdings in shares of ServiceNow by 205.1% in the 2nd quarter. Nebula Research & Development LLC now owns 906 shares of the information technology services provider's stock valued at $931,000 after buying an additional 609 shares during the period. 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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