ServiceNow’s Solid Financials and Growth Prospects Secure Buy Rating from Gregg Moskowitz

Gregg Moskowitz, an analyst from Mizuho Securities, reiterated the Buy rating on ServiceNow (NOW – Research Report). The associated price target is $820.00.

Gregg Moskowitz has given his Buy rating due to a combination of factors that indicate ServiceNow’s robust financial performance and promising future prospects. In the first quarter, ServiceNow reported solid results, with a 21% year-over-year growth in constant currency committed remaining performance obligations (cRPO), although slightly below some investors’ expectations. However, this was balanced by the company’s non-GAAP operating margins surpassing 30% and the successful signing of several large deals involving their GenAI technology. ServiceNow’s guidance for the second quarter was also consistent with expectations, and they confidently reiterated their revenue guidance for the full year, suggesting stability despite slight foreign exchange headwinds.

Moskowitz’s optimism is further bolstered by the company’s strong positioning for high growth in the coming years, driven by persistent demand for workflow automation, significant cross-selling opportunities, and the potential for artificial intelligence monetization. The growth in total RPO and subscription revenue also surpassed estimates, demonstrating the company’s continued revenue expansion. The uptake of ServiceNow’s Pro Plus product, which includes GenAI, has been notably rapid compared to previous product launches, indicating a strong market reception. Large deal activity also remains robust, with a significant increase in transactions over $5 million and $10 million in net new annual contract value. This positive trajectory, coupled with the upcoming Financial Analyst Day event, provides a solid rationale for Moskowitz’s Buy recommendation and $820 price target.

Moskowitz covers the Technology sector, focusing on stocks such as Adobe, Palo Alto Networks, and Confluent. According to TipRanks, Moskowitz has an average return of 15.0% and a 59.55% success rate on recommended stocks.

In another report released yesterday, Bernstein also maintained a Buy rating on the stock with a $846.00 price target.

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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.