ServiceNow (NYSE:NOW) Trading Up 4.6% - Still a Buy?

Key Points

• ServiceNow shares jumped 4.6% to $115.71 on heavy trading volume, supported by optimism about agentic AI, workflow automation and the company’s cybersecurity expansion.
• The company’s latest quarterly results exceeded expectations, with EPS of $0.90 versus $0.86 expected and revenue of $3.99 billion, up 24% year over year. However, ServiceNow reportedly cut hundreds of jobs as part of a restructuring and efficiency initiative.
• Wall Street remains broadly positive, with a “Moderate Buy” consensus and an average price target of $143.39, although the stock’s valuation is elevated at a P/E ratio of 72.32 and insiders have sold shares in recent months.

ServiceNow, Inc. (NYSE:NOW - Get Free Report) shares rose 4.6% during trading on Wednesday . The stock traded as high as $118.36 and last traded at $115.7060. Approximately 40,010,671 shares changed hands during trading, an increase of 66% from the average daily volume of 24,172,545 shares. The stock had previously closed at $110.62.

ServiceNow News Summary

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Analysts highlighted rising customer demand for agentic AI and ServiceNow’s expanding AI product portfolio as potential drivers of long-term subscription and revenue growth. The company is positioning its enterprise AI tools as a way for customers to automate workflows and improve productivity. Can Agentic AI Adoption Fuel ServiceNow's Next Phase of Growth?
• Positive Sentiment: ServiceNow’s shares continued to benefit from momentum in AI, with trading above key moving averages—a technical signal that may encourage additional buying. ServiceNow Stock Holds Above Key Moving Averages
• Positive Sentiment: Recent coverage emphasized that ServiceNow is more than an AI story: its cybersecurity business could become another significant growth engine. The company previously reported quarterly revenue of $3.99 billion, up 24% year over year, and exceeded consensus earnings and revenue estimates. ServiceNow’s Q2 Earnings Showed It’s More Than an AI Stock
• Positive Sentiment: Investment commentary described NOW as attractive amid enterprise workflow automation and AI adoption, while analysts argued that the market may be underestimating ServiceNow’s AI opportunity. Is the Market Mispricing ServiceNow’s AI Future?
• Neutral Sentiment: A new integration with IP Fabric can keep customers’ ServiceNow configuration management databases more accurate, potentially improving product value and customer retention, though the direct financial impact is unclear. IP Fabric’s ServiceNow Integration Keeps CMDB Continuously Accurate and Updated
• Negative Sentiment: ServiceNow reportedly cut hundreds of jobs as part of a global restructuring and efficiency drive. Although management says the changes support streamlined operations and an AI-focused strategy, layoffs underscore pressure to control costs and adapt to changing software-industry conditions. ServiceNow Cut Hundreds of Jobs

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on NOW shares. Needham & Company LLC restated a "buy" rating and issued a $115.00 price target on shares of ServiceNow in a research note on Thursday, July 23rd. Citigroup reaffirmed a "market outperform" rating on shares of ServiceNow in a research report on Thursday, July 23rd. Morgan Stanley set a $180.00 price objective on ServiceNow in a report on Tuesday, July 21st. TD Cowen reissued a "buy" rating and issued a $140.00 target price on shares of ServiceNow in a research report on Friday, July 17th. Finally, Stifel Nicolaus lowered their target price on shares of ServiceNow from $135.00 to $120.00 and set a "buy" rating on the stock in a research note on Thursday, April 23rd. One equities research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, two have issued a Hold rating and three have issued a Sell rating to the company's stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $143.39.

ServiceNow Price Performance

The firm has a fifty day moving average price of $104.99 and a two-hundred day moving average price of $106.84. The stock has a market capitalization of $119.64 billion, a P/E ratio of 72.32, a PEG ratio of 1.86 and a beta of 0.96. The company has a debt-to-equity ratio of 0.43, a quick ratio of 0.70 and a current ratio of 0.70.

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 (EPS) for the quarter, topping analysts' consensus estimates of $0.86 by $0.04. The firm had revenue of $3.99 billion for the quarter, compared to the consensus estimate of $3.93 billion. ServiceNow had a return on equity of 16.45% and a net margin of 11.34%.The company's revenue for the quarter was up 24.0% on a year-over-year basis. During the same period last year, the business posted $0.81 EPS. As a group, analysts expect that ServiceNow, Inc. will post 2.24 EPS for the current fiscal year.

Insiders Place Their Bets

In other 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 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 represents a 7.99% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available 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 stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $87.23, for a total transaction of $130,845.00. Following the completion of the transaction, the director owned 44,930 shares in the company, valued at $3,919,243.90. This trade represents a 3.23% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 19,144 shares of company stock valued at $1,730,097. Insiders own 0.34% of the company's stock.

Institutional Trading of ServiceNow

Several large investors have recently added to or reduced their stakes in NOW. Covenant Asset Management LLC increased its stake in ServiceNow by 169.2% in the 4th quarter. Covenant Asset Management LLC now owns 20,863 shares of the information technology services provider's stock worth $3,196,000 after buying an additional 13,114 shares in the last quarter. Norges Bank purchased a new position in shares of ServiceNow in the fourth quarter valued at about $2,020,992,000. World Investment Advisors boosted its stake in shares of ServiceNow by 411.7% in the fourth quarter. World Investment Advisors now owns 47,955 shares of the information technology services provider's stock worth $7,346,000 after acquiring an additional 38,583 shares during the period. Cohen Klingenstein LLC boosted its stake in shares of ServiceNow by 400.0% in the fourth quarter. Cohen Klingenstein LLC now owns 10,000 shares of the information technology services provider's stock worth $1,532,000 after acquiring an additional 8,000 shares during the period. Finally, Moors & Cabot Inc. grew its position in shares of ServiceNow by 387.7% during the fourth quarter. Moors & Cabot Inc. now owns 45,630 shares of the information technology services provider's stock worth $6,990,000 after purchasing an additional 36,274 shares in the last quarter. 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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