Mizuho lifts ServiceNow stock price target to $1,025 from $980

On Thursday, Mizuho (NYSE:MFG) Securities demonstrated confidence in ServiceNow (NYSE:NOW) by raising the price target on the company’s shares to $1,025 from the previous target of $980. Currently trading at $812.70, with analyst targets ranging from $716 to $1,300, the stock appears slightly overvalued according to InvestingPro Fair Value metrics. The firm maintained an Outperform rating on the stock, signaling a positive outlook for the enterprise software company’s future performance.

The upgrade comes in the wake of ServiceNow’s recent quarterly earnings report, which exceeded expectations. The company maintains impressive gross profit margins of 79.2% and achieved revenue growth of 22.4% over the last twelve months. A key highlight was the company’s current currency (CC) calculated remaining performance obligations (cRPO) growth, which at 22% year-over-year, surpassed guidance by 150 basis points. ServiceNow’s GenAI product suite also saw a surge in demand, contributing to an increase in Professional Plus deals. InvestingPro subscribers have access to 14 additional key insights about ServiceNow’s financial health and market position.

Looking forward, ServiceNow has projected cRPO growth of 19.5% year-over-year in CC terms for the second quarter, aligning with consensus estimates and slightly exceeding expectations from the buy-side. With a strong financial health score of GOOD from InvestingPro and a five-year revenue CAGR of 26%, the company maintains solid fundamentals. Despite a minor reduction in full-year 2025 CC subscription revenue guidance, now set at 19.5% year-over-year growth due to potential macroeconomic challenges, the outlook remains more optimistic than some analysts had anticipated.

The analyst from Mizuho, Gregg Moskowitz, commented on the results and the company’s prospects, stating, "NOW defied the skeptics by reporting a genuinely good quarter." He highlighted the company’s momentum with GenAI and the favorable response to its Pro Plus offerings, which contributed to the positive performance.

Moskowitz also shared his views on the broader market and ServiceNow’s position within it, noting, "While we continue to have macro concerns for 2025, we’re optimistic that NOW can execute to plan." His confidence is based on the ongoing demand for workflow automation, strong cross-sell opportunities, and the potential for AI monetization, which are expected to drive high growth for ServiceNow in the coming years. The analyst concluded with a reiteration of the Outperform rating and the increased price target.

In other recent news, ServiceNow reported strong first-quarter earnings for 2025, with non-GAAP earnings per share of $4.04, surpassing the consensus estimate of $3.83. The company’s revenue reached $3.088 billion, slightly above the forecasted $3.084 billion, marking an 18.5% year-over-year increase. Subscription revenue was reported at $3.005 billion, exceeding the consensus of $2.998 billion, with a 19% year-over-year growth. Analysts from JMP reaffirmed their Market Outperform rating with a price target of $1,300, citing the strong earnings results.

In response to these results, several firms adjusted their price targets for ServiceNow. Canaccord Genuity raised the target to $1,075, maintaining a Buy rating, while Stifel increased it to $975, also with a Buy rating. Evercore ISI lifted their target to $1,000, keeping an Outperform rating, highlighting the company’s robust first-quarter performance and strategic decisions. Meanwhile, Guggenheim raised its target to $724 but maintained a Sell rating, pointing out challenges despite the overall positive outlook.

ServiceNow’s current remaining performance obligations (cRPO) exceeded expectations, growing 22% year-over-year, which was a significant factor in the positive analyst sentiment. The company’s management has projected a 19.5% growth in second-quarter cRPO, maintaining a conservative approach in their guidance. Analysts have noted ServiceNow’s strategic focus on artificial intelligence and its potential impact on future growth.

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