Gregg Moskowitz, an analyst from Mizuho Securities, maintained the Buy rating on ServiceNow (NOW – Research Report). The associated price target remains the same with $820.00.
Gregg Moskowitz has given his Buy rating due to a combination of factors including ServiceNow’s robust Generative AI offerings and their stronger-than-anticipated pricing power. During the recent Analyst Day, management showcased the strong value proposition of ServiceNow’s Generative AI, highlighting a significant price uplift for their enhanced Pro Plus product that exceeds initial expectations. Moreover, ServiceNow’s management has reiterated confidence in achieving a subscription revenue target of over $15 billion by 2026, indicating a consistent compound annual growth rate (CAGR) of 20%, which Moskowitz views as a conservative estimate.
Furthermore, ServiceNow is poised for sustained high growth over the next few years, driven by the demand for workflow automation, ample cross-selling opportunities, and the potential for AI monetization. Despite expectations of incremental cash tax headwinds, the company has provided guidance for non-GAAP operating margin and free cash flow expansion through 2026. According to Moskowitz, the financial projections, including operating and free cash flow margins, align with expectations and suggest a solid financial position for the company, reinforcing the Buy recommendation.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $890.00 price target.
NOW’s price has also changed moderately for the past six months – from $613.910 to $713.330, which is a 16.19% increase.
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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.
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