ServiceNow (NYSE:NOW) Trading Down 3.5% - Should You Sell?

Key Points

• ServiceNow shares fell 3.5% on Thursday, trading around $92 after briefly hitting a low of $91.53, with volume nearly double the daily average.
• The company delivered a better-than-expected Q2, reporting $0.90 EPS on $3.99 billion in revenue, while revenue rose 24% year over year.
• Management also raised full-year subscription revenue guidance again, citing strong AI-driven bookings and more than $1 billion in annual AI contract value, even as some investors remain cautious about the stock’s pullback.

ServiceNow, Inc. (NYSE:NOW - Get Free Report)'s share price traded down 3.5% on Thursday . The company traded as low as $91.53 and last traded at $92.1480. Approximately 47,633,826 shares traded hands during mid-day trading, an increase of 99% from the average daily volume of 23,881,861 shares. The stock had previously closed at $95.46.

Key Headlines Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow beat Q2 expectations, posting $0.90 EPS on $3.99 billion in revenue versus estimates of $0.86 and $3.93 billion, signaling resilient demand for its platform.
• Positive Sentiment: The company raised full-year subscription revenue guidance again, helped by accelerating AI-driven bookings and more than $1 billion in AI annual contract value, a key bullish signal for future growth.
• Positive Sentiment: Analysts turned more constructive after the report, with multiple firms lifting price targets and reiterating bullish ratings, suggesting Wall Street sees room for further upside.
• Positive Sentiment: New partnership and adoption news, including expanded customer deployments and training/implementation agreements, supports the view that ServiceNow’s AI platform is gaining traction across enterprise and public-sector clients.
• Neutral Sentiment: Some commentary notes mixed demand and concerns about timing effects in certain deals, so investors are watching whether the strong quarter reflects durable momentum or some one-time benefits.
• Negative Sentiment: Despite the upbeat results, the stock has still been under pressure this year, and investors remain cautious about broader AI disruption risks to enterprise software spending.

Analysts Set New Price Targets

Several research analysts recently commented on NOW shares. Morgan Stanley set a $180.00 target price on shares of ServiceNow in a report on Tuesday. Citic Securities decreased their price target on shares of ServiceNow from $168.00 to $140.00 and set a "buy" rating for the company in a report on Thursday, May 21st. Sanford C. Bernstein reaffirmed an "outperform" rating and issued a $248.00 price target (up from $236.00) on shares of ServiceNow in a research report on Thursday. HSBC dropped their price objective on ServiceNow from $226.00 to $171.00 and set a "buy" rating on the stock in a research note on Thursday, April 16th. Finally, JPMorgan Chase & Co. boosted their price objective on ServiceNow from $145.00 to $150.00 and gave the stock an "overweight" rating in a research report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, two have assigned a Hold rating and three have given a Sell rating to the stock. Based on data from MarketBeat, ServiceNow has a consensus rating of "Moderate Buy" and an average price target of $143.39.

ServiceNow Trading Down 3.5%

The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13. The business's fifty day simple moving average is $104.67 and its two-hundred day simple moving average is $108.16. The stock has a market capitalization of $95.00 billion, a P/E ratio of 54.92, a P/E/G ratio of 1.71 and a beta of 0.96.

ServiceNow (NYSE:NOW - Get Free Report) last posted its quarterly earnings results on Wednesday, July 22nd. The information technology services provider reported $0.90 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.86 by $0.04. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The company had revenue of $3.99 billion for the quarter, compared to analyst estimates of $3.93 billion. During the same period last year, the business posted $0.81 EPS. The business's quarterly revenue was up 24.0% on a year-over-year basis. As a group, analysts forecast that ServiceNow, Inc. will post 2.33 earnings per share for the current year.

Insider Activity at ServiceNow

In other ServiceNow news, Director Paul Edward Chamberlain sold 1,500 shares of the company's stock in a transaction that occurred 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 completion of the transaction, the director owned 44,930 shares of the company's stock, valued at $3,919,243.90. This represents a 3.23% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Jacqueline P. Canney sold 8,927 shares of the firm's stock in a transaction that occurred 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 of the company's stock, valued at $2,645,977.60. This represents a 23.21% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 28,071 shares of company stock worth $2,529,956 in the last three months. Corporate insiders own 0.34% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of NOW. Millstone Evans Group LLC lifted its holdings in shares of ServiceNow by 400.0% during the 4th quarter. Millstone Evans Group LLC now owns 165 shares of the information technology services provider's stock worth $25,000 after acquiring an additional 132 shares during the period. CBIZ Investment Advisory Services LLC increased its stake in ServiceNow by 540.0% in the fourth quarter. CBIZ Investment Advisory Services LLC now owns 160 shares of the information technology services provider's stock valued at $25,000 after acquiring an additional 135 shares during the period. Blueline Advisors LLC acquired a new position in ServiceNow in the fourth quarter worth about $25,000. Measured Wealth Private Client Group LLC raised its position in ServiceNow by 560.0% in the fourth 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% during the fourth 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 during the period. 87.18% of the stock is currently 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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