ServiceNow, the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Derrick Wood from TD Cowen reiterated a Buy rating on the stock and has a $1,200.00 price target.
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Derrick Wood has given his Buy rating due to a combination of factors that highlight ServiceNow’s strong market position and growth potential. The company delivered a notable performance in the second quarter with a significant increase in current remaining performance obligations, surpassing expectations by approximately 200 basis points. This growth was driven by early renewals and the strength of artificial intelligence in the enterprise sector, which helped to counterbalance challenges in federal spending.
Furthermore, ServiceNow’s adoption of Pro+ and Data SKUs is expanding, and the company is well-positioned to capitalize on the monetization of generative AI. The introduction of new AI and data products has shown strong key performance indicators, with increased deal volumes and sizes, including the largest Now Assist deal to date. Despite some headwinds in the US federal market, management remains confident in their guidance, and the company’s cross-domain system-of-action platform is expected to remain a key differentiator as AI adoption grows. These factors contribute to the positive outlook and the reiterated Buy rating.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $1,150.00 price target.
Based on the recent corporate insider activity of 179 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.