ServiceNow (NYSE:NOW) Shares Down 1.4% – Should You Sell?

ServiceNow, Inc. (NYSE:NOW)’s share price fell 1.4% during mid-day trading on Tuesday. The company traded as low as $138.16 and last traded at $138.3340. Approximately 13,133,084 shares traded hands during mid-day trading, a decline of 39% from the average daily volume of 21,688,852 shares. The stock had previously closed at $140.32.

ServiceNow News Roundup

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: TD Cowen raised its price target to $165 from $140 and maintained a Buy rating. Analyst Derrick Wood cited potential third-quarter strength from customer upgrades, security-product growth, and demand from U.S. federal agencies. ServiceNow stock rises 6% as investors rotate to enterprise software stocks
• Positive Sentiment: New AI governance and automation tools improved the growth narrative. ServiceNow introduced AI Passport, which gives AI agents authorization, business context, and a “kill switch,” along with employee-focused AI tools and additional agent controls. The products could support enterprise adoption by addressing security and oversight concerns. ServiceNow Announces New AI Passport Solution And Significant Advances In AI Governance
• Positive Sentiment: ServiceNow denied interest in acquiring AI-agent startup Decagon. Investors viewed the denial as reducing the risk of another expensive acquisition after recent multibillion-dollar deals, helping refocus attention on organic growth and execution. ServiceNow denies interest in acquiring Decagon
• Positive Sentiment: A three-year collaboration with Stagwell will use ServiceNow’s platform to modernize marketing operations, providing another example of enterprise workflow adoption. Stagwell closes the AI-marketing execution gap with ServiceNow
• Neutral Sentiment: ServiceNow’s faster year-over-year revenue growth than Salesforce and consistent sequential gains support its competitive position, although comparisons suggest Salesforce may offer stronger earnings revisions and a lower valuation. Salesforce vs. ServiceNow: Which AI Software Stock Has the Edge?
• Negative Sentiment: Valuation remains a risk: ServiceNow trades at a high earnings multiple, and analysts continue to question whether its cash generation can justify the premium. A prior selloff and elevated expectations also leave the stock vulnerable if third-quarter results or forward guidance disappoint.

Analyst Ratings Changes

Several brokerages have recently commented on NOW. Sanford C. Bernstein reissued an “outperform” rating on shares of ServiceNow in a research note on Wednesday, September 9th. The Goldman Sachs Group restated a “buy” rating on shares of ServiceNow in a report on Monday, August 3rd. CLSA assumed coverage on ServiceNow in a research note on Monday, July 20th. They issued an “underperform” rating and a $72.00 price objective for the company. Argus lifted their price objective on ServiceNow from $134.00 to $170.00 and gave the stock a “buy” rating in a report on Wednesday, October 7th. Finally, Truist Financial boosted their target price on ServiceNow from $120.00 to $130.00 and gave the stock a “buy” rating in a research report on Thursday, July 9th. One analyst has rated the stock with a Strong Buy rating, thirty-five have given a Buy rating, four have issued a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $150.88.

ServiceNow Stock Up 6.3%

The company has a market cap of $153.92 billion, a PE ratio of 93.04, a P/E/G ratio of 2.55 and a beta of 0.99. The firm has a 50-day simple moving average of $134.23 and a two-hundred day simple moving average of $113.12. The company has a debt-to-equity ratio of 0.43, a current ratio of 0.70 and a quick ratio of 0.70.

ServiceNow (NYSE:NOW) last issued its quarterly earnings data on Wednesday, July 22nd. The information technology services provider reported $0.90 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.86 by $0.04. The business 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 business’s revenue was up 24.0% on a year-over-year basis. During the same period in the prior year, the business earned $0.81 earnings per share. Research analysts anticipate that ServiceNow, Inc. will post 2.22 earnings per share for the current fiscal year.

Insider Activity at ServiceNow

In other ServiceNow news, insider Paul Fipps sold 2,034 shares of the business’s stock in a transaction on Monday, August 31st. The stock was sold at an average price of $147.87, for a total value of $300,767.58. Following the completion of the transaction, the insider directly owned 18,305 shares in the company, valued at approximately $2,706,760.35. The trade was a 10.00% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider Jacqueline Canney sold 7,847 shares of the company’s stock in a transaction on Friday, August 28th. The shares were sold at an average price of $138.00, for a total value of $1,082,886.00. Following the completion of the transaction, the insider owned 30,042 shares of the company’s stock, valued at $4,145,796. The trade was a 20.71% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 14,081 shares of company stock valued at $1,937,904. 0.34% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of NOW. Howard Hughes Medical Institute increased its stake in ServiceNow by 404.5% in the 4th quarter. Howard Hughes Medical Institute now owns 222 shares of the information technology services provider’s stock valued at $34,000 after buying an additional 178 shares during the period. Cornerstone Financial Management LLC boosted its position in ServiceNow by 72.8% during the second quarter. Cornerstone Financial Management LLC now owns 254 shares of the information technology services provider’s stock worth $25,000 after purchasing an additional 107 shares during the period. CrossGen Wealth LLC bought a new position in ServiceNow in the 1st quarter worth $29,000. Caitong International Asset Management Co. Ltd boosted its stake in ServiceNow by 4,157.1% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 298 shares of the information technology services provider’s stock valued at $46,000 after purchasing an additional 291 shares during the period. Finally, Marquette Asset Management LLC boosted its position in shares of ServiceNow by 75.0% in the second quarter. Marquette Asset Management LLC now owns 301 shares of the information technology services provider’s stock valued at $30,000 after acquiring an additional 129 shares during the period. Institutional investors and hedge funds own 87.18% of the company’s stock.

About ServiceNow

ServiceNow, Inc is a cloud-based enterprise software company that helps organizations digitize, automate and manage workflows. Its platform connects people, processes and systems across departments, enabling businesses to replace manual, disconnected activities with standardized digital workflows.

The company’s products and services support a range of functions, including information technology service management, IT operations management, customer service, human resources, risk and security operations, and software development.