David Hynes, an analyst from Canaccord Genuity, maintained the Buy rating on ServiceNow. The associated price target is $1,120.00.
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David Hynes has given his Buy rating due to a combination of factors that highlight ServiceNow’s strong financial performance and strategic positioning. The company reported impressive third-quarter results, with a notable 20.5% growth in currency-adjusted subscription revenue and cRPO, alongside an increase in non-GAAP operating margins to 33.5%. This performance was bolstered by early renewals and a robust free cash flow generation of $592 million, which marked an improvement in margins. Additionally, ServiceNow’s ability to secure large deals, with 103 deals over $1 million in ACV, underscores its strong market position.
Furthermore, ServiceNow’s strategic initiatives, particularly in AI, are progressing well, with the AI business on track to exceed $500 million in ACV this year. The firm’s commitment to innovation is evident in the significant growth of Now Assist deals and the expansion of its U.S. Federal business. Despite the stock’s high valuation, Hynes believes that ServiceNow’s execution and potential in AI-driven applications make it a compelling investment. The upcoming 5-for-1 stock split is also expected to enhance the stock’s accessibility to a broader range of investors, reinforcing the Buy rating.
In another report released today, Piper Sandler also maintained a Buy rating on the stock with a $1,150.00 price target.
NOW’s price has also changed slightly for the past six months – from $942.860 to $911.700, which is a -3.30% drop .