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On Thursday, RBC Capital Markets adjusted their outlook on ServiceNow (NYSE:NOW) shares, raising the price target from the previous $975.00 to $1,060.00. The firm kept its Outperform rating on the stock. With a market capitalization of $192.69 billion, ServiceNow currently trades at a P/E ratio of 134.5x, indicating premium valuation levels according to InvestingPro data. Stifel analysts attribute the positive adjustment to ServiceNow’s strong quarterly results and forward-looking statements, which they believe stand out despite broader negative investor sentiment.
The analysts highlighted ServiceNow’s performance, noting its successful demonstration of momentum in artificial intelligence (AI) and its clear responses to inquiries about digital currency, federal matters, and tariffs. Supporting this view, the company maintains impressive gross profit margins of 79.2% and achieved 22.4% revenue growth in the last twelve months. RBC Capital Markets emphasized that ServiceNow’s execution and company standing are distinctive within the growth software sector.
ServiceNow’s recent financial outcomes and guidance appear to have reassured RBC Capital Markets about the company’s trajectory. The analysts expressed continued support for the stock, encouraging investors to maintain their positions. For deeper insights into ServiceNow’s valuation and growth metrics, investors can access comprehensive analysis through InvestingPro, which features 14 additional key insights about the company. They are anticipating the upcoming Knowledge conference scheduled for May 5-7, where they expect ServiceNow to elaborate on its strategic initiatives, particularly regarding its agentic strategy.
The raised price target reflects RBC Capital Markets’ increased confidence in their estimates for ServiceNow. The analysts concluded their commentary by reiterating their bullish stance, suggesting that the company’s prudent outlook and strong performance justify the heightened expectations for its share value. According to InvestingPro’s Fair Value analysis, the stock currently appears to be trading above its intrinsic value, despite maintaining a "GOOD" overall financial health score.
In other recent news, ServiceNow has reported strong first-quarter results for 2025, surpassing expectations despite economic headwinds. The company achieved notable growth in its remaining performance obligations (RPO), with a 25% increase, and a 22% rise in its current RPO (cRPO). Analysts from Cantor Fitzgerald reaffirmed an Overweight rating with a price target of $1,048, while TD Cowen maintained a Buy rating with a target of $1,100, both citing strong AI product momentum and strategic management decisions. Piper Sandler adjusted its price target to $1,120, maintaining an Overweight rating due to the company’s significant new annual contract value and adoption of AI and CRM technologies.
Meanwhile, Mizuho (NYSE:MFG) Securities raised its price target to $1,025, maintaining an Outperform rating, highlighting ServiceNow’s impressive cRPO growth and demand for its GenAI product suite. Truist Securities kept a Hold rating with a $950 target, noting robust demand and a cautious future outlook due to macroeconomic uncertainties. These developments reflect a diverse range of analyst perspectives, with most expressing confidence in ServiceNow’s ability to sustain growth and innovate within its product offerings. Investors are particularly attentive to the company’s AI advancements and federal sector performance, which are seen as key drivers of future growth.
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