ServiceNow’s Price Target Raised Ahead of Earnings Announcement

• ServiceNow's Agentic AI initiative aims to enhance its AI capabilities, attracting U.S. enterprises and potentially improving its stock performance.
• Oppenheimer maintains an "Outperform" rating for ServiceNow (NYSE: NOW), raising the price target from $970 to $1,100.
• The company's strategic focus on AI could drive future growth, with its stock showing volatility but maintaining a strong market position.

ServiceNow (NYSE: NOW) is a prominent player in the enterprise software industry, known for its cloud-based platform that helps businesses automate and streamline their operations. The company is making waves with its Agentic AI initiative, which is attracting attention from U.S. enterprises. This strategic move aims to enhance ServiceNow's AI capabilities, positioning it as a leader in AI-driven enterprise solutions.

The Agentic AI initiative is expected to boost the adoption of ServiceNow's platform among businesses looking to leverage advanced AI technologies. This could lead to improved operational efficiency and innovation for these companies. As ServiceNow expands its influence in the AI sector, this development may impact its stock performance positively.

On May 6, 2025, Oppenheimer maintained its "Outperform" rating for ServiceNow (NYSE: NOW), with the stock priced at $978.05 at the time. Oppenheimer also raised the price target from $970 to $1,100, indicating confidence in ServiceNow's growth prospects. This aligns with the company's strategic push in AI, which could drive future stock performance.

Currently, ServiceNow's stock is priced at $968.13, reflecting a slight decrease of 1.01% or $9.92. The stock has fluctuated between $964.50 and $978 during the trading day. Over the past year, it has reached a high of $1,198.09 and a low of $637.99, showcasing its volatility.

ServiceNow's market capitalization is approximately $200.4 billion, with a trading volume of 520,343 shares. As the company continues to expand its AI offerings, its market position and stock performance may see further growth, supported by its strategic initiatives and positive analyst outlook.

Truist Securities upgraded ServiceNow (NYSE:NOW) to Buy from Hold and raised its price target to $1,200 from $950, citing the company’s growing strategic role in enterprise IT and strong positioning to capitalize on AI trends.

Analysts see ServiceNow as a standout among enterprise software providers, forecasting that the company will continue to consolidate the IT stack by offering an integrated platform that appeals to large global enterprises. Truist emphasized that macroeconomic uncertainty is creating an opportunity for ServiceNow to gain market share as businesses look to streamline operations and reduce vendor complexity.

The firm views ServiceNow as a “rare compounder” with a scalable platform that supports long-term growth through both upselling and cross-selling into its existing customer base. The analysts also noted that this year’s pullback in the stock presents a favorable entry point for investors.

Truist expects ServiceNow’s AI capabilities and platform architecture to remain key differentiators, driving durable growth across its expanding product portfolio.

ServiceNow (NYSE:NOW) stock plunged over 12% intra-day today despite the IT management software firm delivering better-than-expected fourth-quarter earnings and revenue. The sharp decline came as investors reacted to weaker-than-anticipated guidance for subscription revenue in the coming quarters.

The company reported adjusted earnings per share of $3.67 for the fourth quarter, slightly surpassing analysts’ expectations of $3.65. Revenue for the period reached $2.96 billion, in line with consensus forecasts. However, the earnings beat was marginal, marking the narrowest constant currency outperformance since the pandemic at just 0.4% above company guidance.

ServiceNow’s subscription business remained a key growth driver, with revenue from subscriptions climbing 21% year-over-year to $2.87 billion. The company also saw strong momentum in its AI-driven automation tools, which help customers streamline operations.

However, concerns mounted over its outlook. Remaining performance obligations—a crucial measure of future revenue commitments—stood at $10.27 billion at the end of the quarter, reflecting a 19% annual increase. Yet, ServiceNow’s first-quarter subscription revenue guidance of $2.995 billion to $3.00 billion fell short of the $3.04 billion analysts had projected.

For full-year 2025, the company forecasts subscription revenue between $12.64 billion and $12.68 billion, missing the Wall Street consensus of $12.83 billion. The weaker-than-expected projections overshadowed its strong Q4 performance, prompting investors to reassess the stock’s near-term growth potential.

RBC Capital analysts raised their price target for ServiceNow (NYSE:NOW) to $1,210 from $1,045, reaffirming an Outperform rating on the stock. The increase reflects confidence in the company’s ability to sustain long-term growth, driven by its expanding role in enterprise operations and the ongoing integration of generative AI technologies.

ServiceNow is positioned as a gold-standard investment for the next 5-10 years, with profitable, primarily organic growth expected to continue. The company is evolving beyond its IT origins, offering a platform that enables enterprises to build custom SaaS applications for HR, finance, legal, facilities, and procurement. This broadening scope positions ServiceNow as a key player in the enterprise software market.

The $1,210 price target is based on a 19x EV/revenue multiple for 2025, representing a slight premium to peers due to ServiceNow’s superior growth and margin profile. On a free cash flow basis, this translates to a 60.5x EV/2025 FCF multiple.

With generative AI in its early stages, ServiceNow is well-positioned to capitalize on this transformative technology over the next decade, supporting its trajectory as a foundational platform for enterprise innovation.

Raymond James has initiated coverage of ServiceNow (NYSE:NOW) with an Outperform rating and a price target of $1,200, reflecting strong confidence in the company's long-term prospects despite current valuation challenges. The analysis highlights ServiceNow’s resilience and growth potential as a leading enterprise software provider poised for continued expansion.

The firm sees ServiceNow maintaining its premium valuation due to its robust growth trajectory, driven by sustained demand for its cloud-based workflow solutions and ongoing advancements in artificial intelligence. The company’s ability to monetize AI innovations and achieve incremental margin improvements is expected to bolster overall revenue growth, projected at around 20%.

For long-term investors, ServiceNow’s trajectory is compared to other iconic software leaders, such as Microsoft, Salesforce, and Adobe, at similar revenue milestones. Following a comparable path, ServiceNow has the potential to deliver significant relative outperformance in the coming years, solidifying its position as a market leader.

Shares of ServiceNow (NYSE:NOW) shares rose more than 5% intra-day today following the company's announcement of a fourth-quarter subscription revenue forecast that surpassed Wall Street expectations. The IT management software provider also raised its full-year subscription revenue outlook, driven by continued demand from both new and existing customers.

For the fourth quarter, ServiceNow projected subscription revenue between $2.875 billion and $2.880 billion, exceeding the Street consensus of $2.85 billion. Additionally, the company increased its annual subscription revenue forecast to a range of $10.655 billion to $10.660 billion, up from its previous guidance of $10.575 billion to $10.585 billion.

In the third quarter, ServiceNow reported adjusted earnings per share of $3.72 on revenue of $2.79 billion, beating expectations of $3.45 per share and $2.75 billion in revenue. The company also saw a 16% increase in current remaining performance obligations, reaching $9.36 billion.

• Wells Fargo maintains a "Buy" rating for ServiceNow, indicating a positive outlook on the company's future performance.
• The stock price of $938.65 reflects a 1.81% increase, showcasing investor confidence and strong market performance.
• ServiceNow's resilience is highlighted by its stock price nearing the 52-week high, with a market capitalization of approximately $193.36 billion, indicating its significant impact in the tech industry.

ServiceNow (NYSE:NOW) is a leading provider of cloud-based solutions that help companies manage digital workflows. The company offers a range of services, including IT service management, operations management, and business management. ServiceNow competes with other tech giants like Salesforce and Microsoft in the enterprise software market.

On October 9, 2024, Wells Fargo maintained its "Buy" rating for ServiceNow, with the stock priced at $938.65. This rating suggests confidence in the company's future performance. The stock's price reflects a 1.81% increase from the previous session, indicating strong investor interest and performance that surpasses the general market trend.

ServiceNow's stock price of $938.65 represents a $16.65 increase, showcasing its resilience and growth potential. The stock traded between $915.96 and $943.30 during the day, demonstrating some volatility. However, it remains close to its 52-week high of $945.46, highlighting its upward trajectory.

With a market capitalization of approximately $193.36 billion, ServiceNow is a significant player in the tech industry. The trading volume for the day was 843,290 shares, reflecting active investor engagement. This level of activity suggests that investors are optimistic about the company's prospects.

ServiceNow's stock performance is noteworthy, especially considering its 52-week range of $527.24 to $945.46. The company's ability to maintain a high stock price indicates strong market confidence. As highlighted by Wells Fargo's "Buy" rating, ServiceNow is well-positioned for continued growth in the competitive tech landscape.