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Investing.com - UBS has lowered its price target on ServiceNow (NYSE:NOW) to $1,100 from $1,125 while maintaining a Buy rating on the stock. The new target sits within the broader analyst range of $734 to $1,300 for the $198 billion market cap company, which according to InvestingPro analysis is currently fairly valued.
The adjustment comes after ServiceNow reported second-quarter 2025 results that included a 200 basis point beat on backlog/current remaining performance obligation (cRPO) growth, which reached 21.5% compared to the company’s guidance of 19.5%.
ServiceNow slightly raised its 2025 constant currency subscription revenue growth guidance by 50 basis points, from 19.5% to 20.0%, while reaffirming its operating margin and free cash flow guidance.
For the third quarter of 2025, ServiceNow set its cRPO growth guidance at 18%, which UBS noted was at the low end of investor expectations.
UBS attributed the more cautious outlook to a softer U.S. Federal vertical, which has prompted ServiceNow to add more caution to its fourth-quarter outlook.
In other recent news, ServiceNow has reported a strong second quarter for 2025, significantly surpassing both earnings and revenue expectations. The company posted non-GAAP earnings per share of $4.09, well above the consensus estimate of $3.57. Total (EPA:TTEF) revenue reached $3.215 billion, exceeding the forecasted $3.121 billion and reflecting a 22.4% increase compared to the previous year. Following these results, Needham raised its price target for ServiceNow to $1,200, maintaining a Buy rating due to the company’s robust quarterly performance. Similarly, Citi increased its price target to $1,234, also maintaining a Buy rating, highlighting ServiceNow’s momentum in AI and its better-than-expected subscription revenue and profitability metrics. JMP Securities reiterated its Market Outperform rating with a $1,300 price target, noting the company’s impressive second-quarter results. These developments underscore the positive sentiment among analysts regarding ServiceNow’s financial health and growth prospects.
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