Bank of America Securities analyst Bradley Sills has reiterated their bullish stance on NOW stock, giving a Buy rating yesterday.
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Bradley Sills’s rating is based on several positive indicators for ServiceNow’s performance and market position. The company has shown strong deal activity in its core IT service management and IT operations management sectors, with notable upgrades from standard to Pro versions. Additionally, there is increased adoption in the HR sector driven by AI automation, and consistent activity in the federal sector, despite some caution regarding the Q3 pipeline. These factors contribute to a potential 0.5% upside in Q2 current remaining performance obligation growth, aligning with the company’s guidance.
Furthermore, ServiceNow is considered a leader in the $65 billion IT and custom applications industry, with a premium valuation justified by its strong position in enterprise cloud platforms for workflow automation. The company’s focus on AI, particularly with the Now Assist initiative, positions it as a significant player in the AI space, with expectations for its AI revenue target to increase. Despite some macroeconomic concerns, a strong quarterly performance could alleviate these issues, supporting the Buy rating and the raised price objective of $1,110.
In another report released yesterday, TD Cowen 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.