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On Thursday, Canaccord Genuity analysts raised their price target on ServiceNow (NYSE:NOW) shares to $1,075 from the previous target of $900, while maintaining a Buy rating on the stock. Currently trading at $812.70 with a market capitalization of $168 billion, the stock’s adjustment follows a significant pullback since late January and a notable after-hours trading increase. According to InvestingPro data, analyst targets for ServiceNow range from $716 to $1,300, reflecting diverse market expectations.
The analysts at Canaccord Genuity expressed a positive outlook on ServiceNow, describing the company as "one of the highest-quality names in large-cap software." This assessment is supported by InvestingPro data showing impressive revenue growth of 22.4% and industry-leading gross margins of 79.2%. Despite acknowledging the stock’s valuation at roughly 35 times enterprise value to free cash flow (EV/FCF) for the calendar year 2026 estimates as not cheap, they believe the recent 25% decline in the stock price since late January presents an attractive entry point relative to its historical performance. InvestingPro Tips highlight the company’s strong financial health score and efficient operations.
ServiceNow’s stock experienced an approximate 10% surge in after-hours trading, which the analysts mentioned in their commentary. They suggested that while some of the immediate gains might have already occurred, they still consider the stock a solid opportunity for investors to build or increase their positions. The analysts emphasized the company’s status as a best-in-class entity, especially in a market environment where they observed that high correlations have indiscriminately affected stocks of quality.
The analysts concluded their remarks by reiterating their Buy rating on ServiceNow, signaling their confidence in the company’s ongoing potential for growth and performance in the market. They highlighted the opportunity to invest in a high-quality software company amid current market conditions, which have seen many such stocks face downward pressure.
In other recent news, ServiceNow reported first-quarter 2025 earnings that surpassed expectations, with non-GAAP earnings per share of $4.04, exceeding the consensus estimate of $3.83. The company achieved revenue of $3.088 billion, slightly above the forecasted $3.084 billion, marking an 18.5% year-over-year increase. Subscription revenue was reported at $3.005 billion, showing a 19% year-over-year growth. Additionally, ServiceNow’s current remaining performance obligations (cRPO) reached $10.310 billion, a robust 22% growth, outperforming the company’s guidance.
In analyst updates, Stifel raised their price target for ServiceNow to $975, maintaining a Buy rating, while Evercore ISI increased their target to $1,000, keeping an Outperform rating. Guggenheim also adjusted their price target to $724, though they maintained a Sell rating due to perceived risks and challenges. JMP analysts reaffirmed a Market Outperform rating with a $1,300 price target following the strong earnings results.
ServiceNow has also announced a strategic partnership with Devoteam to modernize customer relationship management (CRM) in the EMEA region. This collaboration aims to leverage ServiceNow’s AI capabilities and Devoteam’s digital transformation expertise to enhance CRM strategies. The partnership is expected to drive innovation and improve customer experiences across Europe, the Middle East, and Africa.
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