Kash Rangan, an analyst from Goldman Sachs, reiterated the Buy rating on ServiceNow (NOW – Research Report). The associated price target remains the same with $910.00.
Kash Rangan has given his Buy rating due to a combination of factors including ServiceNow’s impressive first quarter results for the fiscal year 2024. The company exceeded expectations with its currency-corrected subscription revenue growth and reported operating margin (OpM) and free cash flow margin (FCFM), which surpassed consensus predictions and guidance. Despite a post-earnings dip in the stock price, the fundamentals such as revenue outperformance and operational efficiencies support a positive outlook.
Furthermore, Rangan’s optimism is bolstered by ServiceNow’s significant transactions over $5 million, which doubled year-over-year, indicating strong large deal momentum and the advantage of platform consolidation trends. Additionally, the introduction and growth of Generation-Artificial Intelligence (Gen-AI) products are contributing substantially to new net annual contract value (NNACV), underscoring ServiceNow’s innovative edge. These factors, combined with a conservative yet solid guidance for the coming quarters, suggest potential for continued outperformance, cementing the Buy rating.
In another report released yesterday, JMP Securities also maintained a Buy rating on the stock with a $825.00 price target.
Based on the recent corporate insider activity of 203 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NOW in relation to earlier this year.
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ServiceNow (NOW) Company Description:
Founded in 2004 and based in California, ServiceNow, Inc. is a software company which provides enterprise cloud computing solutions to help companies manage digital workflows for enterprise operations. The company offers its solutions to various sectors including healthcare, education, oil and gas, telecommunications, government, consumer products, technology, IT and financial services.
