Analyst Bradley Sills from Bank of America Securities reiterated a Buy rating on ServiceNow and keeping the price target at $1,200.00.
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Bradley Sills has given his Buy rating due to a combination of factors that highlight ServiceNow’s strong performance and potential for growth. The company has shown robust results in the third quarter, with key indicators such as net new annual contract value growth exceeding 30%, which addresses concerns about federal demand. Additionally, ServiceNow’s progress with Now Assist suggests that the company is well-positioned to capitalize on AI advancements, which could lead to growth acceleration and a potential re-rating of the stock.
Management’s decision to raise guidance for subscription revenue, operating margin, and free cash flow margin further underscores the company’s strong performance. The current remaining performance obligation growth also surpassed expectations, driven partly by early renewals. Now Assist’s annual contract value is on track to reach $500 million by year-end, setting the stage for further growth towards a $1 billion target by 2026. These factors, combined with ServiceNow’s strategic positioning in the IT and custom applications industry, support the reiterated Buy rating and a price objective of $1,200.
In another report released today, Piper Sandler also maintained a Buy rating on the stock with a $1,150.00 price target.