Analyst Keith Weiss from Morgan Stanley maintained a Hold rating on ServiceNow and increased the price target to $1,040.00 from $950.00.
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Keith Weiss has given his Hold rating due to a combination of factors including ServiceNow’s market positioning and financial projections. The updated Total Addressable Market (TAM) analysis indicates a significant market opportunity, particularly with the expansion beyond core IT workflows into areas like CRM and Industry workflows. However, despite this potential, the company’s current valuation appears to have already priced in these growth opportunities, as evidenced by its high enterprise value to free cash flow ratio.
Additionally, while currency fluctuations have provided a financial tailwind, boosting subscription revenue projections, these factors alone are not sufficient to warrant a more bullish outlook. The need for substantial growth in non-IT workflows to meet ambitious revenue targets adds a layer of uncertainty. Therefore, while ServiceNow shows promise in expanding its market reach, the current valuation and growth expectations justify a Hold rating.
Based on the recent corporate insider activity of 177 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NOW in relation to earlier this year.