ServiceNow (NYSE:NOW) Trading 4.7% Higher – Time to Buy?

ServiceNow, Inc. (NYSE:NOW)’s share price shot up 4.7% on Tuesday . The company traded as high as $112.28 and last traded at $110.5450. 32,987,730 shares changed hands during mid-day trading, an increase of 37% from the average daily volume of 24,034,133 shares. The stock had previously closed at $105.56.

Key Stories Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Strong second-quarter performance supports the stock. ServiceNow exceeded earnings and revenue expectations, delivered 24% year-over-year revenue growth, and raised its full-year outlook. Large-deal activity and customer renewals also remained strong, countering fears that AI could undermine demand for its core software. Is the Market Mispricing ServiceNow’s AI Future?
• Positive Sentiment: AI is increasingly viewed as a revenue opportunity rather than a threat. ServiceNow’s AI offerings reportedly surpassed $1 billion in annual contract value, while the company is shifting toward consumption-based pricing that could allow revenue to grow as customers use more AI-powered workflows. ServiceNow Is Building an AI Business for Enterprises
• Positive Sentiment: Cybersecurity and workflow automation could provide additional growth engines. Analysts highlighted ServiceNow’s expanding cybersecurity business alongside continued adoption of workflow automation, enterprise AI, and integrations that improve the accuracy of customers’ configuration-management databases. ServiceNow’s Q2 Earnings Showed It’s More Than an AI Stock
• Positive Sentiment: Investor sentiment improved as software stocks rotated higher. ServiceNow was among several enterprise software names that advanced as investors shifted back toward software and AI beneficiaries. A CNBC “Final Trades” contributor also selected NOW, while multiple analyst articles described the shares as attractive after their substantial yearly decline. Software Rebounds on AI Rotation
• Neutral Sentiment: Valuation comparisons are becoming more favorable, but not conclusive. Coverage comparing ServiceNow with Salesforce argues that the valuation gap has narrowed while ServiceNow’s growth remains stronger. However, investors still need to weigh its premium earnings multiple against execution and growth expectations. ServiceNow Vs. Salesforce
• Negative Sentiment: AI-disruption concerns and sector volatility remain risks. Bears remain concerned that AI agents could reduce demand for traditional, seat-based software, while recent weakness in technology stocks shows that sentiment can change quickly. ServiceNow’s elevated valuation leaves limited room for growth or guidance to disappoint.

Wall Street Analysts Forecast Growth

Several research analysts have recently issued reports on NOW shares. Canaccord Genuity Group dropped their price objective on shares of ServiceNow from $200.00 to $145.00 and set a “buy” rating on the stock in a report on Thursday, April 23rd. The Goldman Sachs Group reissued a “buy” rating and set a $145.00 target price (down from $163.00) on shares of ServiceNow in a research report on Wednesday, July 8th. Mizuho cut their price target on ServiceNow from $150.00 to $140.00 and set an “outperform” rating for the company in a report on Thursday, April 23rd. BTIG Research reiterated a “buy” rating and issued a $150.00 price objective on shares of ServiceNow in a research report on Wednesday, July 22nd. Finally, Bank of America began coverage on ServiceNow in a report on Monday, May 18th. They set a “buy” rating and a $130.00 price objective on the stock. One analyst has rated the stock with a Strong Buy rating, thirty-six have given a Buy rating, two have assigned a Hold rating and three have given a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $143.39.

ServiceNow Stock Performance

The firm has a market cap of $114.30 billion, a P/E ratio of 69.09, a PEG ratio of 1.67 and a beta of 0.96. The stock’s 50 day moving average is $104.81 and its two-hundred day moving average is $107.12. 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 announced its quarterly earnings results on Wednesday, July 22nd. The information technology services provider reported $0.90 EPS for the quarter, topping analysts’ consensus estimates of $0.86 by $0.04. The firm had revenue of $3.99 billion during the quarter, compared to analysts’ expectations of $3.93 billion. ServiceNow had a net margin of 11.34% and a return on equity of 16.45%. The company’s revenue for the quarter was up 24.0% compared to the same quarter last year. During the same quarter last year, the company earned $0.81 earnings per share. As a group, equities analysts predict that ServiceNow, Inc. will post 2.33 EPS for the current year.

Insider Transactions at ServiceNow

In related news, Director Paul Edward Chamberlain sold 1,500 shares of the business’s stock in a transaction on 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 of the company’s stock, valued at $3,919,243.90. The trade was a 3.23% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Anita M. Sands sold 16,445 shares of the stock in a transaction on Thursday, May 14th. The stock was sold at an average price of $90.14, for a total value of $1,482,352.30. Following the transaction, the director owned 30,090 shares of the company’s stock, valued at $2,712,312.60. This represents a 35.34% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders sold 19,144 shares of company stock valued at $1,730,097. Corporate insiders own 0.34% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in NOW. Millstone Evans Group LLC increased its position in shares of ServiceNow by 400.0% during the 4th quarter. Millstone Evans Group LLC now owns 165 shares of the information technology services provider’s stock worth $25,000 after purchasing an additional 132 shares in the last quarter. CBIZ Investment Advisory Services LLC boosted its position in ServiceNow by 540.0% in the fourth quarter. CBIZ Investment Advisory Services LLC now owns 160 shares of the information technology services provider’s stock valued at $25,000 after buying an additional 135 shares in the last quarter. Blueline Advisors LLC acquired a new position in ServiceNow in the fourth quarter valued at about $25,000. Measured Wealth Private Client Group LLC grew its stake in ServiceNow by 560.0% during the fourth quarter. Measured Wealth Private Client Group LLC now owns 165 shares of the information technology services provider’s stock worth $25,000 after buying an additional 140 shares during the last quarter. Finally, Wealth Watch Advisors INC grew its stake in ServiceNow by 432.3% during the fourth quarter. Wealth Watch Advisors INC now owns 165 shares of the information technology services provider’s stock worth $25,000 after buying an additional 134 shares during the last quarter. 87.18% of the stock is 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.