ServiceNow (NOW) Stock: Analysts Maintain Bullish Stance Despite 55% Drop

Key Takeaways

• Wall Street firms maintained Buy ratings on ServiceNow stock, setting price targets between $115 and $236
• Bernstein’s $236 target represents the highest on the Street, suggesting potential gains exceeding 157% from current prices
• Shares opened at $91.51, reflecting a 40.19% decline year-to-date and a 55.11% drop over one year
• Bailard Inc. expanded its NOW holdings by 422.9% during Q4; institutional ownership stands at 87.18%
• The company delivered Q1 revenue of $3.77 billion, representing 22.1% year-over-year growth and meeting Street estimates

ServiceNow (NOW) stock showed modest gains Monday as multiple Wall Street analysts reaffirmed their positive outlook on the enterprise software provider, despite the shares trading significantly below previous peaks.

ServiceNow, Inc., NOW

Shares began trading at $91.51, hovering near the 12-month low of $81.24. The stock reached a 12-month high of $211.48. Year-to-date performance shows a 40.19% decline, with a 55.11% drop over the trailing twelve months.

The substantial pullback hasn’t deterred analyst conviction.

Bernstein’s Peter Weed maintains the most aggressive Street target at $236, increased from a previous $226, alongside a Buy recommendation. This target implies upside potential of approximately 157% from present trading levels.

Wells Fargo analyst Michael Turrin confirmed his Buy rating with a $160 price objective. Citi’s Tyler Radke maintained his Buy stance with a $158 target. Goldman Sachs analyst Gabriela Borges similarly upheld a Buy rating, targeting $163.

The overall analyst consensus stands at Moderate Buy, with the average target price reaching $144.71, based on MarketBeat tracking.

Institutional Capital Flows Toward ServiceNow

While individual investor sentiment remains divided, institutional capital has demonstrated contrarian positioning.

Bailard Inc. expanded its ServiceNow holdings by 422.9% during the fourth quarter, concluding the period with 79,350 shares representing approximately $12.2 million in value. Multiple other institutional investors similarly increased their allocations.

Nicholas Company Inc. expanded its position by 532.6%, finishing the quarter holding 426,015 shares valued above $65 million. AG2R LA Mondiale Gestion D Actifs increased its stake by 437.5%. Pier 88 Investment Partners raised its holdings by 393.2%.

Institutional investors and hedge funds control 87.18% of NOW stock.

Company insiders present a contrasting narrative. During the previous 90 days, insiders disposed of 25,164 shares totaling approximately $2.5 million. Insider Jacqueline P. Canney sold 8,927 shares at an average of $89.60 in April, decreasing her position by 23.21%.

Financial Performance and Forward Outlook

ServiceNow disclosed first-quarter revenue of $3.77 billion, narrowly surpassing the $3.75 billion analyst consensus. The company achieved earnings per share of $0.97, aligning with projections. Revenue climbed 22.1% compared to the prior-year period.

The enterprise software firm recorded a net margin of 12.59% alongside an 18.16% return on equity.

ServiceNow plans to secure $4 billion through a bond offering, which analysts acknowledge increases financial leverage without serving as an immediate operational catalyst.

FedEx recently broadened its collaboration with ServiceNow, which analysts interpret as validation of sustained enterprise appetite for the company’s automation and workflow solutions.

BMO Capital maintained an Outperform rating, highlighting the platform’s strategic positioning around autonomous execution capabilities and governance frameworks.

Analyst forecasts currently project full-year earnings per share of $2.35 for ServiceNow. The 50-day moving average rests at $102.18, while the 200-day moving average stands at $131.38.

Monday’s trading volume reached approximately 10 million shares, falling short of the three-month average volume of 18 million shares.

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