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On Tuesday, ServiceNow (NYSE:NOW), a prominent player in the software industry with impressive gross profit margins of 79%, received a reaffirmation of its Market Outperform rating and a $1,300.00 price target from JMP analysts, following the company’s announcement of a definitive agreement to acquire Moveworks, an AI Assistant provider, for $2.85 billion. The acquisition is expected to enhance ServiceNow’s AI and automation capabilities by integrating with Moveworks’ front-end AI assistant technology. According to InvestingPro analysis, the company currently appears overvalued based on its Fair Value calculations.
The endorsement comes in the wake of ServiceNow’s shares declining 26.06% year-to-date (YTD), with a particularly sharp 13.49% drop in the past week. Despite these challenges, the company maintains strong revenue growth of 22.44% over the last twelve months. JMP analysts have maintained their non-GAAP earnings per share (EPS) estimates for ServiceNow through 2027, projecting consistent revenue growth and performance in line with, or slightly above, consensus expectations. InvestingPro data reveals 18 additional key insights about ServiceNow’s performance and outlook.
For 2025, the firm sustains its non-GAAP EPS estimate at $16.50, aligned with the consensus estimate of $16.43, and anticipates a revenue growth of 19%. Similarly, for 2026, the non-GAAP EPS estimate is held at $19.98, compared to the consensus of $19.91, with an expected revenue increase of 19%. Looking ahead to 2027, JMP analysts continue to foresee a non-GAAP EPS of $23.75, despite a slightly higher consensus estimate of $24.40, and predict an 18% revenue growth.
The strategic move to acquire Moveworks aligns with ServiceNow’s ongoing efforts to strengthen its position in the AI and automation sectors. The acquisition is poised to combine ServiceNow’s agentic AI and automation strengths with Moveworks’ customer-facing AI solutions, aiming to deliver enhanced value to ServiceNow’s customers.
ServiceNow’s commitment to expanding its AI capabilities through strategic acquisitions and its maintained financial estimates by JMP analysts reflect the company’s confidence in its growth trajectory and its ability to navigate the competitive landscape of AI and automation solutions. With an overall financial health score rated as GOOD by InvestingPro, and sufficient cash flows to cover interest payments, the company appears well-positioned for future growth. Discover comprehensive insights about ServiceNow and 1,400+ other top stocks through InvestingPro’s detailed Research Reports, transforming complex financial data into actionable intelligence.
In other recent news, ServiceNow announced its acquisition of Moveworks, an AI firm, for $2.85 billion in cash and stock. This acquisition aims to enhance ServiceNow’s AI capabilities, particularly in areas such as enterprise search and AI-driven automation. Despite the significant investment, ServiceNow reported a revenue increase of 22.44% over the past year, reaching $10.98 billion, and maintains strong gross profit margins of 79.18%. The acquisition has drawn mixed reactions from analysts, with Goldman Sachs maintaining a Buy rating and a $1,200 price target, while Mizuho (NYSE:MFG) reduced its target to $1,100 but upheld an Outperform rating. Evercore ISI also retained an Outperform rating with a $1,150 price target, noting the acquisition’s potential to expand ServiceNow’s market presence. Canaccord Genuity reiterated a Buy rating with a $1,275 target, emphasizing the strategic alignment of the acquisition with ServiceNow’s AI strategy. The deal is expected to close in the second half of 2025, with analysts closely monitoring its impact on ServiceNow’s financials and market positioning. As the company integrates Moveworks’ technology, investors will be watching for further developments in ServiceNow’s AI and automation offerings.
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