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Investing.com - TD Cowen has raised its price target on ServiceNow (NYSE:NOW) to $1,250.00 from $1,200.00 while maintaining a Buy rating on the stock. The software giant, currently valued at $198.1 billion, trades at a P/E ratio of 115, reflecting its premium valuation as a prominent player in the enterprise software space.
The research firm cited ServiceNow’s impressive third-quarter current remaining performance obligation (cRPO) upside with 20.5% constant currency growth, representing its largest beat in more than two years at approximately 250 basis points.
Federal net new annual contract value (NNACV) grew more than 30%, exceeding market expectations, according to TD Cowen’s analysis.
ServiceNow raised its fiscal year 2025 guidance following the quarterly beat, while fourth-quarter cRPO guidance remained in line with expectations despite the company adding extra prudence due to the government shutdown.
TD Cowen noted that ServiceNow "continues to prove it’s the best monetizer of AI at the Apps layer" and sees "multiple S-curves building through CY26+," factors that contributed to the price target increase.
In other recent news, ServiceNow has reported strong third-quarter earnings, capturing the attention of several investment firms. The company achieved a 21.5% growth in subscription revenue, surpassing its 19.5% guidance, as noted by Goldman Sachs, which subsequently raised its price target to $1,250 while maintaining a Buy rating. Wolfe Research highlighted ServiceNow’s subscription revenue growth of 20.5% year-over-year, with current remaining performance obligations also growing by the same percentage, beating forecasts partly due to early renewals. Piper Sandler reiterated an Overweight rating, citing a 30% growth in Federal Net New Annual Contract Value and projecting $500 million in Now Assist Annual Contract Value by year-end. RBC Capital maintained an Outperform rating, emphasizing robust results from ServiceNow’s U.S. Federal business segment. Wells Fargo increased its price target to $1,275, reflecting higher estimates based on ServiceNow’s updated 2025 guidance and its implications for future years. These developments underscore the company’s strong performance and investor confidence in its growth trajectory.
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