ServiceNow (NYSE:NOW) Shares Gap Up – Still a Buy?

ServiceNow, Inc. (NYSE:NOW) shares gapped up prior to trading on Tuesday . The stock had previously closed at $103.42, but opened at $110.14. ServiceNow shares last traded at $107.4280, with a volume of 14,794,498 shares changing hands.

Key Headlines Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Bank of America restarted coverage on ServiceNow with a Buy rating and a $130 target, calling it an AI winner in the emerging agentic AI era. BofA Reinstates Coverage of ServiceNow, Salesforce. It Says 1 Is an AI Beneficiary.
• Positive Sentiment: Several articles said Wall Street is warming to ServiceNow because its workflow software could serve as a control layer for AI agents, easing fears that AI will replace its business. Wall Street Is Warming Up to ServiceNow Stock. That’s Because It’s Now a Bet on Agentic AI.
• Positive Sentiment: Analysts and commentators highlighted that the recent selloff may have been overdone, with ServiceNow’s valuation looking more attractive after a sharp yearlong decline. Assessing ServiceNow (NOW) Valuation After A Year Of Sharp Share Price Declines
• Positive Sentiment: Media and analyst pieces also framed the stock’s rebound as part of a broader rotation back into software names, with ServiceNow singled out as one of the sector leaders. ServiceNow and Snowflake Stocks Trade Up, What You Need To Know
• Neutral Sentiment: Some reports noted that the stock has fallen sharply over the past year despite revenue and profit growth, so investors are still weighing strong fundamentals against a still-extended valuation. After a 50% Drop, Is ServiceNow Stock Worth Buying?
• Negative Sentiment: There are still lingering concerns that AI disruption could pressure traditional enterprise software, and some commentary warned the recent bounce could fade if those fears return. ServiceNow stock flashes a death cross amid rising SaaSpocalypse concerns

Analyst Upgrades and Downgrades

NOW has been the topic of a number of research reports. Morgan Stanley decreased their price target on shares of ServiceNow from $210.00 to $180.00 and set an “overweight” rating on the stock in a research note on Thursday, April 23rd. Bank of America initiated coverage on shares of ServiceNow in a research note on Monday. They issued a “buy” rating and a $130.00 price target on the stock. FBN Securities decreased their price target on shares of ServiceNow from $160.00 to $120.00 in a research note on Thursday, April 23rd. Royal Bank Of Canada reiterated an “outperform” rating and issued a $121.00 price target on shares of ServiceNow in a research note on Tuesday, May 5th. Finally, Citizens Jmp reiterated a “market outperform” rating and issued a $157.00 price target on shares of ServiceNow in a research note on Tuesday, May 5th. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, six have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $141.89.

ServiceNow Stock Performance

The stock’s 50-day simple moving average is $99.35 and its 200-day simple moving average is $126.89. The stock has a market cap of $106.33 billion, a price-to-earnings ratio of 61.46, a price-to-earnings-growth ratio of 1.85 and a beta of 0.82. The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13.

ServiceNow (NYSE:NOW) last announced its earnings results on Wednesday, April 22nd. The information technology services provider reported $0.97 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.97. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The firm had revenue of $3.77 billion for the quarter, compared to analyst estimates of $3.75 billion. During the same quarter in the prior year, the business posted $0.81 EPS. The business’s revenue was up 22.1% compared to the same quarter last year. Analysts forecast that ServiceNow, Inc. will post 2.35 earnings per share for the current fiscal year.

Insider Buying and Selling at ServiceNow

In other ServiceNow news, Director Anita M. Sands sold 16,445 shares of the stock in a transaction that occurred on Thursday, May 14th. The shares were sold at an average price of $90.14, for a total transaction of $1,482,352.30. Following the transaction, the director owned 30,090 shares in the company, valued at $2,712,312.60. This represents a 35.34% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Paul Fipps sold 3,696 shares of the company’s stock in a transaction that occurred on Monday, February 23rd. The stock was sold at an average price of $101.77, for a total transaction of $376,141.92. Following the sale, the insider directly owned 8,061 shares of the company’s stock, valued at approximately $820,367.97. This trade represents a 31.44% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 31,767 shares of company stock worth $2,906,098. 0.34% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in NOW. World Investment Advisors grew its holdings in ServiceNow by 411.7% in the fourth quarter. World Investment Advisors now owns 47,955 shares of the information technology services provider’s stock worth $7,346,000 after purchasing an additional 38,583 shares during the period. Cohen Klingenstein LLC grew its holdings in shares of ServiceNow by 400.0% during the fourth quarter. Cohen Klingenstein LLC now owns 10,000 shares of the information technology services provider’s stock valued at $1,532,000 after buying an additional 8,000 shares during the last quarter. Sumitomo Mitsui Trust Group Inc. grew its holdings in shares of ServiceNow by 385.9% during the fourth quarter. Sumitomo Mitsui Trust Group Inc. now owns 2,599,397 shares of the information technology services provider’s stock valued at $398,202,000 after buying an additional 2,064,440 shares during the last quarter. Torray Investment Partners LLC grew its holdings in shares of ServiceNow by 390.5% during the fourth quarter. Torray Investment Partners LLC now owns 40,629 shares of the information technology services provider’s stock valued at $6,224,000 after buying an additional 32,345 shares during the last quarter. Finally, Jennison Associates LLC grew its holdings in shares of ServiceNow by 280.1% during the fourth quarter. Jennison Associates LLC now owns 8,432,389 shares of the information technology services provider’s stock valued at $1,291,758,000 after buying an additional 6,213,762 shares during the last quarter. 87.18% of the stock is owned by institutional investors.

About ServiceNow

ServiceNow (NYSE: NOW) is a cloud computing company that builds enterprise software to manage digital workflows and automate business processes. Its offerings are designed to replace manual work and legacy systems with cloud-based, service-oriented applications that support IT operations, customer service, human resources, security response and other enterprise functions.

The company’s flagship product family is the Now Platform, a suite of subscription software and platform services that includes IT Service Management (ITSM), IT Operations Management (ITOM), IT Business Management (ITBM), Customer Service Management (CSM), HR Service Delivery, Security Operations and Asset Management.