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Investing.com - Cantor Fitzgerald has reiterated an Overweight rating on ServiceNow (NYSE:NOW) with a price target of $1,200.00 following the company’s strong second-quarter 2025 performance. The company, currently valued at $201 billion, has demonstrated impressive gross profit margins of 78.5% according to InvestingPro data.
ServiceNow reported better-than-expected second-quarter results and raised its guidance for both third-quarter and full-year 2025. Despite the implied fourth-quarter subscription revenue guide coming in slightly below consensus estimates, Cantor Fitzgerald views this as conservative given the strong second-quarter performance. With revenue growth of 21.1% over the last twelve months and a robust five-year revenue CAGR of 26%, the company continues to show strong momentum.
The company demonstrated significant momentum in its AI offerings, with Pro Plus business growing 50% quarter-over-quarter and Control Tower reaching full-year expectations within its first 60 days on the market. ServiceNow also secured a $20 million annual contract value Now Assist deal during the second quarter.
Management maintained cautious guidance regarding its U.S. Federal vertical, which represents approximately 10% of revenue, despite signing six new U.S. Federal logos in the second quarter. The company continues to assume zero net new annual contract value from this segment in the second half of 2025. InvestingPro analysis shows ServiceNow maintains a "GOOD" overall financial health score, with particularly strong marks in growth and profitability metrics.
Cantor Fitzgerald expects ServiceNow’s momentum to continue into 2026, progressing toward its $1 billion Now Assist annual contract value target and $15 billion subscription revenue target, with consumption of Now Assist potentially serving as a further catalyst into 2027 and beyond. For detailed insights into ServiceNow’s growth trajectory and AI potential, access the comprehensive Pro Research Report available on InvestingPro, which includes 15+ additional ProTips and advanced financial metrics.
In other recent news, ServiceNow’s latest quarterly earnings report surpassed analyst expectations, prompting the company to increase its forward guidance. This positive performance has led several firms to raise their price targets for ServiceNow. DA Davidson increased its price target to $1,250, maintaining a Buy rating, while TD Cowen and RBC Capital both raised their targets to $1,200, citing strong second-quarter results and impressive performance, respectively. BMO Capital also adjusted its price target to $1,160, despite noting that sales trends were slightly below expectations in the second quarter.
Additionally, ServiceNow has entered into a significant $1.2 billion cloud-computing deal with Google (NASDAQ:GOOGL), spanning over five years. This agreement is a notable achievement for Google Cloud as it competes with major players like Amazon (NASDAQ:AMZN) Web Services and Microsoft (NASDAQ:MSFT) Azure. The recent developments highlight ServiceNow’s ongoing business momentum and strategic partnerships in the tech industry.
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