ServiceNow (NYSE:NOW) Trading Down 6.5% - Time to Sell?

Key Points

• ServiceNow shares fell 6.5% on Tuesday, hitting an intraday low of $103.08 as trading volume jumped well above average, signaling notable near-term selling pressure.
• Despite the drop, the company’s latest earnings were solid: EPS matched estimates at $0.97 and revenue came in slightly above forecasts at $3.77 billion, with revenue up 22.1% year over year.
• Analyst sentiment remains constructive overall, with ServiceNow carrying a “Moderate Buy” rating and an average price target of $141.85, even as some insiders have recently sold shares.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) shares dropped 6.5% during mid-day trading on Tuesday . The stock traded as low as $103.08 and last traded at $106.7980. Approximately 35,322,936 shares were traded during trading, an increase of 47% from the average daily volume of 24,017,369 shares. The stock had previously closed at $114.19.

Key Headlines Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: NICE announced an AI-first integration with ServiceNow to unify customer engagement and enterprise workflows, reinforcing ServiceNow’s role as a core platform in enterprise automation. NICE Launches AI-First ServiceNow Integration to Unify Customer Engagement and Enterprise Workflows
• Positive Sentiment: Thoma Bravo’s founder said fears of an AI-driven “SaaSpocalypse” are fading, calling AI an “enormous tailwind” for software companies, which may ease investor concerns about SaaS demand. “SaaSpocalypse is over,” Thoma Bravo founder says
• Neutral Sentiment: Market commentary comparing EXLS and NOW as value options keeps ServiceNow in the spotlight, but it does not provide a direct operational catalyst. EXLS vs. NOW: Which Stock Is the Better Value Option?
• Negative Sentiment: Risk-off trading and weakness in the Nasdaq are pressuring enterprise software stocks, including ServiceNow, as investors take profits after the recent rebound. Nasdaq Slides as Chip Stocks Reverse Course
• Negative Sentiment: Multiple reports highlight ServiceNow shares as sliding on Tuesday, indicating near-term selling pressure despite otherwise constructive long-term software and AI sentiment. ServiceNow Shares Are Sliding Tuesday: What's Going On?

Analyst Upgrades and Downgrades

NOW has been the subject of several analyst reports. Benchmark initiated coverage on shares of ServiceNow in a report on Wednesday, April 1st. They set a "buy" rating and a $125.00 price target for the company. Evercore boosted their price target on shares of ServiceNow from $140.00 to $150.00 and gave the company an "outperform" rating in a report on Tuesday, May 5th. Royal Bank Of Canada restated an "outperform" rating and set a $121.00 price objective on shares of ServiceNow in a research note on Tuesday, May 5th. Raymond James Financial cut their price objective on shares of ServiceNow from $160.00 to $130.00 and set an "outperform" rating on the stock in a research note on Thursday, April 23rd. Finally, TD Cowen reiterated a "buy" rating and issued a $140.00 target price on shares of ServiceNow in a research report on Thursday, April 23rd. Two investment analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, five have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, ServiceNow presently has an average rating of "Moderate Buy" and an average target price of $141.85.

ServiceNow Stock Down 6.5%

The company has a debt-to-equity ratio of 0.13, a quick ratio of 0.84 and a current ratio of 0.84. The company has a market capitalization of $110.11 billion, a price-to-earnings ratio of 63.65, a P/E/G ratio of 1.86 and a beta of 0.94. The stock's fifty day simple moving average is $99.69 and its two-hundred day simple moving average is $121.36.

ServiceNow (NYSE:NOW - Get Free Report) last issued its quarterly earnings results on Wednesday, April 22nd. The information technology services provider reported $0.97 earnings per share for the quarter, meeting analysts' consensus estimates of $0.97. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The company had revenue of $3.77 billion during the quarter, compared to the consensus estimate of $3.75 billion. During the same period in the prior year, the company earned $0.81 EPS. ServiceNow's revenue was up 22.1% on a year-over-year basis. On average, sell-side analysts anticipate that ServiceNow, Inc. will post 2.35 EPS for the current year.

Insider Buying and Selling at ServiceNow

In other ServiceNow news, insider Paul Fipps sold 1,048 shares of the company's stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $98.51, for a total value of $103,238.48. Following the completion of the sale, the insider directly owned 12,072 shares of the company's stock, valued at approximately $1,189,212.72. This represents a 7.99% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. 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 business's stock in a transaction dated 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 owned 44,930 shares in the company, valued at approximately $3,919,243.90. The trade was 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. Insiders sold a total of 28,071 shares of company stock valued at $2,529,956 over the last 90 days. Insiders own 0.34% of the company's stock.

Hedge Funds Weigh In On ServiceNow

Large investors have recently made changes to their positions in the business. Norges Bank acquired a new position in shares of ServiceNow in the 4th quarter valued at approximately $2,020,992,000. World Investment Advisors grew its position in shares of ServiceNow by 411.7% in the 4th quarter. World Investment Advisors now owns 47,955 shares of the information technology services provider's stock valued at $7,346,000 after purchasing an additional 38,583 shares during the period. Cohen Klingenstein LLC grew its position in shares of ServiceNow by 400.0% in the 4th quarter. Cohen Klingenstein LLC now owns 10,000 shares of the information technology services provider's stock valued at $1,532,000 after purchasing an additional 8,000 shares during the period. Moors & Cabot Inc. grew its position in shares of ServiceNow by 387.7% in the 4th quarter. Moors & Cabot Inc. now owns 45,630 shares of the information technology services provider's stock valued at $6,990,000 after purchasing an additional 36,274 shares during the period. Finally, Sumitomo Mitsui Trust Group Inc. grew its position in shares of ServiceNow by 385.9% in the 4th quarter. Sumitomo Mitsui Trust Group Inc. now owns 2,599,397 shares of the information technology services provider's stock valued at $398,202,000 after purchasing an additional 2,064,440 shares during the period. 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.

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