ServiceNow stock price target raised to $1,200 from $1,050 at Needham

Investing.com - Needham has raised its price target on ServiceNow (NYSE:NOW) to $1,200 from $1,050 while maintaining a Buy rating following the company’s strong quarterly performance. The company, currently valued at $198.41 billion, is trading near InvestingPro’s Fair Value estimate, demonstrating its solid market position as a prominent player in the software industry.

ServiceNow delivered results that exceeded the high-end of guidance by 200 basis points for both Subscription Revenue and cRPO. The company’s Operating Margin was 270 basis points above guidance, attributed to Subscription Revenue outperformance and internal AI efficiencies. With an impressive gross profit margin of 78.92% and revenue growth of 21.01% over the last twelve months, ServiceNow continues to demonstrate strong operational execution.

Needham noted that ServiceNow remains on track to drive $1 Billion of Now Assist ACV by CY26. The firm also observed that Public Sector headwinds appear largely in-line with management’s previous assessment, with the company expressing confidence in its ability to execute despite U.S. Federal dynamics.

ServiceNow has raised its Subscription Revenue guidance to 19.5%-20% year-over-year on a constant-currency basis. This adjustment positions the company closer to the 20% durable growth rate that investors are seeking.

The quarterly results included Self-Hosted Early Renewals that were previously expected during the second half of 2025, contributing to the revenue outperformance in the reported quarter. Analysts maintain a strong bullish consensus on ServiceNow, with price targets ranging from $734 to $1,300. For deeper insights into ServiceNow’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro, which includes 14 additional key investment tips and detailed analysis.

In other recent news, ServiceNow reported impressive financial results for the second quarter of 2025, surpassing analyst expectations. The company achieved non-GAAP earnings per share of $4.09, significantly higher than the consensus estimate of $3.57. Total (EPA:TTEF) revenue for the quarter amounted to $3.215 billion, exceeding the forecasted $3.121 billion and marking a 22.4% year-over-year increase. Citi responded to these results by raising its price target for ServiceNow to $1,234, maintaining a Buy rating due to strong performance metrics. JMP Securities also reiterated its Market Outperform rating and set a price target of $1,300, citing the robust quarterly performance. The company’s subscription revenue and profitability metrics showed larger-than-expected improvements, contributing to the positive outlook. Despite these achievements, the stock experienced a slight dip in aftermarket trading. These developments underscore ServiceNow’s strong position and potential for future growth.

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