Cigna earnings beat by $0.04, revenue topped estimates
Monday, ServiceNow (NYSE:NOW) stock maintained its Overweight rating from analysts at Cantor Fitzgerald, with a continued positive outlook despite near-term caution. The firm’s analyst, Thomas Blakey, highlighted that ServiceNow’s shares have experienced a pullback but are still trading at approximately 10.7 times the calendar year 2026 Revenue. According to InvestingPro data, the company currently commands a market capitalization of $159.84 billion, with analyst price targets ranging from $716 to $1,426. Blakey’s 12-month price target for the company is set at $1,048, which is around 14 times the revenue, aligning with ServiceNow’s one-year average next twelve months (NTM) multiple.
The analyst noted the necessity for ServiceNow to present a strong beat and raise in its first-quarter 2025 report to justify its valuation in the short term. With an anticipated easier comparison in the first quarter of 2025, Blakey believes that a 20% year-over-year growth in subscription revenue is achievable, which would slightly surpass the mid-point of the company’s guidance. The company has demonstrated strong execution with a 22.44% revenue growth in the last twelve months and maintains impressive gross profit margins of 79.18%.
Despite the positive outlook, Cantor Fitzgerald expressed caution regarding the potential for ServiceNow to increase its forecast, especially considering the uncertainties surrounding the U.S. Federal sector, which accounts for about 15% of the company’s revenue. The current macroeconomic environment and specific challenges in this vertical add to the unpredictability.
Furthermore, while the firm is optimistic about ServiceNow’s acquisition of Moveworks and the general use of agentic AI, it recognizes that pricing pressures and the time required to ramp up solutions to production could limit near-term upside potential.
Cantor Fitzgerald also made minor adjustments to its model for committed remaining performance obligations (cRPO), based on management’s comments about the seasonality of cRPO, which is expected to reach its lowest point in the third quarter and pick up pace in the fourth quarter as customer renewals occur. These adjustments do not affect the revenue estimates or the price target for ServiceNow.
In other recent news, ServiceNow has been the focus of several analyst updates and reports. TD Cowen adjusted its price target for ServiceNow to $1,100, maintaining a Buy rating, with expectations that the company’s first-quarter results will align with guidance amidst ongoing macroeconomic challenges. Cantor Fitzgerald reaffirmed an Overweight rating with a price target of $1,048, noting the potential for ServiceNow to achieve a 20% year-over-year subscription revenue growth, albeit with some caution due to uncertainties in the U.S. Federal revenue segment. Oppenheimer also lowered its price target to $970 but upheld an Outperform rating, emphasizing ServiceNow’s robust fundamentals and deep integration within enterprise IT infrastructure.
Goldman Sachs reduced its price target to $1,050 while maintaining a Buy rating, citing concerns over potential cuts in public sector IT spending and tariff policy volatility. Despite these challenges, ServiceNow’s subscription revenue growth is expected to slightly surpass its forecast. Raymond (NSE:RYMD) James also lowered its price target to $1,000, maintaining an Outperform rating, as the company prepares for its 2025 Knowledge user conference, which will highlight AI and agentic adoption. The firm noted potential challenges in growth metrics but suggested that patient investors might benefit from accelerated AI adoption. Overall, ServiceNow’s recent developments reflect a mix of cautious optimism and strategic adjustments in response to market conditions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.