Stifel Nicolaus Issues Pessimistic Forecast for ServiceNow (NYSE:NOW) Stock Price

Key Points

• Stifel Nicolaus cut its price target on ServiceNow from $135 to $120 while maintaining a "buy" rating, a target that the firm says implies roughly a 38% upside from the prior close.
• Shares fell about 15.8% to $86.81 despite a modest Q1 beat and ~22% YoY subscription revenue growth, as investors reacted to margin headwinds from the Armis acquisition, delayed large deals in the Middle East, and multiple analyst price-target trims.
• Street sentiment is mixed but leans positive: the consensus rating is "Moderate Buy" with a consensus target of $155.86, most analysts at Buy, high institutional ownership (~87%), and some recent insider selling noted.

ServiceNow (NYSE:NOW - Get Free Report) had its price target reduced by equities researchers at Stifel Nicolaus from $135.00 to $120.00 in a report issued on Thursday,MarketScreener reports. The firm currently has a "buy" rating on the information technology services provider's stock. Stifel Nicolaus' price objective suggests a potential upside of 38.23% from the company's previous close.

Several other equities research analysts have also recently issued reports on the stock. BMO Capital Markets decreased their price objective on shares of ServiceNow from $120.00 to $115.00 and set an "outperform" rating for the company in a research report on Thursday. Argus upgraded ServiceNow to a "strong-buy" rating in a research note on Wednesday, February 4th. Deutsche Bank Aktiengesellschaft dropped their price objective on ServiceNow from $180.00 to $135.00 and set a "buy" rating on the stock in a report on Thursday, April 16th. Cantor Fitzgerald reissued an "overweight" rating and set a $200.00 target price on shares of ServiceNow in a research report on Thursday, January 29th. Finally, Benchmark assumed coverage on ServiceNow in a report on Wednesday, April 1st. They issued a "buy" rating and a $125.00 price target for the company. Three investment analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, six have issued a Hold rating and one has assigned 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 $155.86.

ServiceNow Stock Down 15.8%

Shares of NOW traded down $16.26 during midday trading on Thursday, hitting $86.81. The company had a trading volume of 17,589,364 shares, compared to its average volume of 20,024,004. ServiceNow has a 1 year low of $81.24 and a 1 year high of $211.48. The firm has a market capitalization of $89.95 billion, a P/E ratio of 52.17, a P/E/G ratio of 1.68 and a beta of 1.01. The company has a debt-to-equity ratio of 0.12, a quick ratio of 1.00 and a current ratio of 1.00. The company's 50-day simple moving average is $105.55 and its 200-day simple moving average is $138.83.

ServiceNow (NYSE:NOW - Get Free Report) last released its earnings results 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 net margin of 13.16% and a return on equity of 18.54%. The firm had revenue of $3.77 billion for the quarter, compared to analyst estimates of $3.75 billion. During the same period in the prior year, the firm earned $4.04 earnings per share. The business's quarterly revenue was up 22.1% compared to the same quarter last year. As a group, sell-side analysts expect that ServiceNow will post 2.49 EPS for the current year.

Insider Buying and Selling at ServiceNow

In other ServiceNow news, Director Paul Edward Chamberlain sold 1,500 shares of the stock in a transaction that occurred on Thursday, February 12th. The stock was sold at an average price of $101.17, for a total transaction of $151,755.00. Following the completion of the sale, the director directly owned 46,430 shares of the company's stock, valued at approximately $4,697,323.10. This trade represents a 3.13% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Kevin Thomas Mcbride sold 1,400 shares of the company's stock in a transaction that occurred on Friday, February 13th. The stock was sold at an average price of $105.71, for a total value of $147,994.00. Following the sale, the insider owned 26,314 shares of the company's stock, valued at $2,781,652.94. This trade represents a 5.05% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 16,237 shares of company stock valued at $1,697,162 in the last ninety days. Insiders own 0.34% of the company's stock.

Institutional Trading of ServiceNow

Hedge funds have recently modified their holdings of the business. Cohen Klingenstein LLC grew its position in ServiceNow by 400.0% during the fourth quarter. Cohen Klingenstein LLC now owns 10,000 shares of the information technology services provider's stock worth $1,532,000 after buying an additional 8,000 shares during the period. Sumitomo Mitsui Trust Group Inc. lifted its position in shares of ServiceNow by 385.9% during 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 acquiring an additional 2,064,440 shares during the period. Natural Investments LLC grew its holdings in shares of ServiceNow by 332.0% in the 4th quarter. Natural Investments LLC now owns 16,453 shares of the information technology services provider's stock worth $2,520,000 after acquiring an additional 12,644 shares during the period. Focus Financial Network Inc. grew its holdings in shares of ServiceNow by 286.1% in the 4th quarter. Focus Financial Network Inc. now owns 53,650 shares of the information technology services provider's stock worth $8,219,000 after acquiring an additional 39,756 shares during the period. Finally, Telos Capital Management Inc. increased its stake in ServiceNow by 706.0% in the 4th quarter. Telos Capital Management Inc. now owns 50,940 shares of the information technology services provider's stock valued at $7,803,000 after purchasing an additional 44,620 shares in the last quarter. 87.18% of the stock is owned by institutional investors and hedge funds.

Trending Headlines about ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Q1 subscription revenue and top-line: Subscription revenue grew ~22% YoY and overall Q1 revenue slightly beat consensus, showing continued demand for ServiceNow’s AI-driven platform. BusinessWire Q1 Release
• Positive Sentiment: Company raised its annual subscription revenue outlook, citing stronger AI adoption — a sign management sees sustainable demand for Now Assist and related products. Reuters: Boosts Outlook
• Neutral Sentiment: Strategic moves: ServiceNow closed the Armis acquisition to expand into OT/IoT/cyber asset visibility and announced deeper Google Cloud AI integrations — positive long-term product synergy but with short-term execution risk. Yahoo: Google Cloud Partnership
• Neutral Sentiment: Management tone and events calendar: CEO emphasized AI-driven productivity and an Analyst Day is scheduled for May 4 — useful for forward guidance clarity. Investors.com: Analyst Day
• Negative Sentiment: Middle East deal delays: Management said delayed large deals in the Middle East created ~75 bps of subscription-revenue headwind in Q1 and could push some closures into later quarters — an immediate growth and sentiment headwind. Yahoo: Deal Delays
• Negative Sentiment: Margins to be pressured by Armis purchase: ServiceNow warned the acquisition will create a roughly 75‑bp FY operating-margin headwind (125 bps in Q2), which contributed to investor concern about near-term profitability. WSJ: Armis Margin Impact
• Negative Sentiment: Market reaction and analyst moves: Despite the beat, sentiment soured — multiple shops trimmed price targets and the stock drew higher short interest amid broader AI/disruption worries, amplifying the selloff. Finviz: Analyst PT Cuts Reuters: Short Interest

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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