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On Monday, TD Cowen analysts raised the price target for ServiceNow stock (NYSE: NYSE:NOW) to $1,150 from $1,100 while maintaining a Buy rating. This adjustment follows the firm’s recent Technology, Media, and Telecom (BCBA:TECO2m) (TMT) Conference in New York City, where ServiceNow’s General Manager and Senior Vice President of Core Business Workflows, Josh Kahn, was hosted. According to InvestingPro data, the stock has delivered an impressive 54% return over the past year, though current metrics suggest it may be trading above its Fair Value.
During the conference, it was highlighted that ServiceNow’s Core Business Workflows product group has reached $1.1 billion in annual recurring revenue. The group experienced a growth of approximately 40% in net new annual contract value in the last quarter. This growth was partly driven by strong traction with ServiceNow Assist and the Generative AI upgrade cycle. The company maintains impressive gross profit margins of 79% and has achieved overall revenue growth of 21% in the last twelve months.
Additionally, ServiceNow is implementing new bundling strategies for its Back Office products. These strategies are designed to increase product attachment rates and foster greater engagement with C-level executives.
The analysts reiterated their Buy rating on ServiceNow stock, emphasizing the company’s potential for continued growth and innovation in its product offerings.
In other recent news, ServiceNow has seen a series of significant developments. The company received an increased price target from BMO Capital, with the new goal set at $1,150, reflecting confidence in ServiceNow’s growth prospects and product offerings. Bernstein also maintained an Outperform rating with a $1,003 price target, focusing on the potential revenue growth from ServiceNow’s Pro Plus (GenAI) products, which are projected to contribute significantly to future revenue. Meanwhile, RBC Capital reiterated its Outperform rating with a target of $1,100, expressing optimism about ServiceNow’s AI integration and potential market positioning.
Additionally, ServiceNow is undergoing a reshuffle in its sales division, with top executives Erica Volini and Ulrik Nehammer departing, as part of the company’s strategic adjustments. This follows the earlier resignation of another key sales executive, Paul Smith. Cantor Fitzgerald reaffirmed their Overweight rating with a $1,048 price target, highlighting ServiceNow’s AI capabilities and strategic position in the AI landscape. These developments indicate that analysts remain largely optimistic about ServiceNow’s future, despite the ongoing changes within the company.
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