ServiceNow (NOW – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Keith Weiss from Morgan Stanley maintained a Hold rating on the stock and has a $950.00 price target.
Keith Weiss has given his Hold rating due to a combination of factors that highlight both opportunities and challenges for ServiceNow. The company is positioned well for long-term growth, with plans to expand its total addressable market (TAM) from $165 billion in 2023 to over $350 billion by 2027. This growth is expected to be driven by the expansion of automated workflows, including CRM, data and analytics, and industry-specific solutions. However, while ServiceNow’s core business and customer retention rates are strong, with a 98% gross retention rate and significant contributions from existing customers, the market’s expectations for continued high performance are already reflected in the stock’s premium valuation.
Moreover, ServiceNow’s strategy to integrate AI and data into its platform, aiming to become the ‘AI Operating System for Enterprises,’ presents both a significant opportunity and a challenge. The company currently has a substantial base of AI customers and partners, but the competitive landscape in AI and data solutions is rapidly evolving. The recent acquisition of Logik.ai underscores ServiceNow’s focus on expanding its CRM-based workflows, yet the success of these initiatives remains to be fully realized. These factors contribute to a balanced view, warranting a Hold rating as investors await further evidence of execution on these strategic fronts.
Weiss covers the Technology sector, focusing on stocks such as Adobe, Intuit, and ServiceNow. According to TipRanks, Weiss has an average return of 13.9% and a 65.98% success rate on recommended stocks.