ServiceNow (NYSE:NOW) Trading Down 5.2% - Should You Sell?

Key Points

• ServiceNow shares fell 5.2% in mid-day trading, touching as low as $102.61 amid lighter-than-normal volume. The stock was last trading around $105.44, down from the previous close of $111.26.
• Analyst sentiment remains generally positive, with an average rating of “Moderate Buy” and an average price target of $140.60. Recent moves include UBS lifting its target to $115 while keeping a neutral rating, though Weiss Ratings downgraded the stock to sell.
• Fundamentals are still solid: ServiceNow recently reported EPS of $0.97 on revenue of $3.77 billion, both in line to slightly above expectations, with revenue up 22.1% year over year. However, the decline in shares came as broader enterprise software names weakened after IBM’s disappointing results raised concerns about tech spending.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) shares were down 5.2% during mid-day trading on Tuesday . The company traded as low as $102.61 and last traded at $105.4430. 6,956,843 shares traded hands during mid-day trading, a decline of 71% from the average session volume of 23,619,059 shares. The stock had previously closed at $111.26.

ServiceNow News Summary

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: UBS raised its price target on ServiceNow to $115 from $100 and kept a neutral rating, signaling stable demand expectations and modest upside potential. Street Insider
• Positive Sentiment: Recent commentary says ServiceNow’s AI strategy may be an opportunity rather than a threat, with the company raising its Now Assist AI targets and positioning AI as a premium add-on across workflow products. Yahoo Finance
• Positive Sentiment: New partner announcements, including C1Secure’s SmartRAMP 20x and Empower AI’s GSA enterprise IT award, highlight continued ecosystem activity around the ServiceNow platform. Yahoo Finance
• Neutral Sentiment: Several opinion pieces and stock screeners discussed ServiceNow’s long-term software rebound and relative attractiveness versus peers, but these were not direct catalysts. Seeking Alpha
• Neutral Sentiment: Analysts and commentators continue to debate ServiceNow’s valuation versus peers, with some noting AI-driven growth but also margin pressure from acquisitions. Zacks
• Negative Sentiment: ServiceNow and other enterprise software names moved lower after IBM’s disappointing preliminary quarterly results raised concern about broader tech spending and sentiment. TipRanks

Wall Street Analyst Weigh In

NOW has been the topic of a number of research analyst reports. Barclays restated an "overweight" rating and issued a $134.00 price target (up from $132.00) on shares of ServiceNow in a research note on Tuesday, May 5th. Needham & Company LLC reaffirmed a "buy" rating and set a $115.00 price objective on shares of ServiceNow in a research report on Tuesday, May 5th. Wells Fargo & Company decreased their price objective on shares of ServiceNow from $185.00 to $160.00 and set an "overweight" rating on the stock in a report on Thursday, April 23rd. Weiss Ratings lowered shares of ServiceNow from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Friday. Finally, Raymond James Financial cut their target price on shares of ServiceNow from $160.00 to $130.00 and set an "outperform" rating for the company in a research note on Thursday, April 23rd. One research analyst has rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, four have issued a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $140.60.

ServiceNow Price Performance

The company has a 50 day moving average of $102.95 and a 200-day moving average of $110.65. The firm has a market capitalization of $110.80 billion, a P/E ratio of 64.10, a P/E/G ratio of 1.79 and a beta of 0.96. The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13.

ServiceNow (NYSE:NOW - Get Free Report) last posted its quarterly earnings data on Wednesday, April 22nd. The information technology services provider reported $0.97 earnings per share for the quarter, hitting the consensus estimate of $0.97. ServiceNow had a return on equity of 18.16% and a net margin of 12.59%.The firm had revenue of $3.77 billion for the quarter, compared to analysts' expectations of $3.75 billion. During the same quarter last year, the business earned $0.81 EPS. The company's quarterly revenue was up 22.1% compared to the same quarter last year. On average, sell-side analysts predict 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 dated Friday, April 24th. The shares were sold at an average price of $89.60, for a total transaction of $799,859.20. Following the transaction, the insider directly owned 29,531 shares of the company's stock, valued at approximately $2,645,977.60. This trade represents a 23.21% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Paul Fipps sold 1,048 shares of ServiceNow stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $98.51, for a total transaction of $103,238.48. Following the completion of the sale, the insider owned 12,072 shares of the company's stock, valued at $1,189,212.72. This trade represents a 7.99% 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. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders have sold 28,071 shares of company stock valued at $2,529,956. 0.34% of the stock is currently owned by insiders.

Institutional Investors Weigh In On ServiceNow

Several institutional investors have recently made changes to their positions in the stock. Wedge Capital Management L L P NC grew its position in ServiceNow by 5.4% during the second quarter. Wedge Capital Management L L P NC now owns 2,512 shares of the information technology services provider's stock worth $249,000 after buying an additional 129 shares in the last quarter. Investors Research Corp lifted its position in shares of ServiceNow by 787.2% during the 2nd quarter. Investors Research Corp now owns 7,674 shares of the information technology services provider's stock valued at $762,000 after acquiring an additional 6,809 shares during the period. Tema ETFs LLC lifted its position in shares of ServiceNow by 10.0% during the 2nd quarter. Tema ETFs LLC now owns 20,679 shares of the information technology services provider's stock valued at $2,053,000 after acquiring an additional 1,885 shares during the period. Canvas Wealth Advisors LLC grew its holdings in shares of ServiceNow by 60.7% during the 2nd quarter. Canvas Wealth Advisors LLC now owns 28,524 shares of the information technology services provider's stock worth $2,832,000 after purchasing an additional 10,773 shares in the last quarter. Finally, Fiduciary Financial Group LLC bought a new position in shares of ServiceNow in the second quarter worth $404,000. 87.18% of the stock is currently owned by institutional investors.

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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