Key Stats for ServiceNow Stock
- Price change for ServiceNow stock in last 6 months: 76%
- $NOW Stock Price as of Oct. 23: $159
- 52-Week High: $193
- $NOW Stock Price Target: $157
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What Happened?
Bank of America raised its price target on ServiceNow (NOW) to $180 and kept its Buy rating, five days before the company reports Q3 results on October 28.
Raising a target this close to the date suggests the bank expects a quarter that is in line with or better than its estimates, which makes ServiceNow stock one to watch into the report.
In Q2, subscription revenue came in at $3.877 billion, up 23% in constant currency and 1.5 points above the high end of the company’s guidance.
Operating margin hit 29.5%, about 3 points above guidance.
ServiceNow signed 123 deals worth more than $1 million in net new annual contract value, up 40% from a year earlier.
Its AI business passed $1 billion in annual contract value, and management is targeting $1.5 billion by the end of 2026. The renewal rate was 98%.
For Q3, ServiceNow guided to subscription revenue of $3.975 billion to $3.980 billion, about 20% growth. It expects an operating margin of 31%.
Those are the numbers the quarter will be measured against.
Management said about half of the Q2 beat came from on-prem revenue pulled forward from Q3, mostly from strong U.S. federal demand.
The CFO called this a timing issue and said she is confident in the Q3 and full-year guidance.
Management also admitted that gross margin faces short-term pressure, and heavier AI use and more customers on hyperscaler partners are driving the cost.
The company expects that pressure to ease over time.
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What the Market Is Telling Us About ServiceNow Stock
The timing is what sharpens the focus.
An analyst willing to raise a target days before a report is putting real conviction behind the quarter. That conviction now becomes part of how the market judges the actual results.
If ServiceNow delivers in line with or ahead of BofA’s expectations, the new $180 target could quickly look conservative. A miss would put both ServiceNow stock and the freshly raised target under pressure.
So the setup is simple.
A clean report would back up the bullish call. Any slip, especially on the guidance numbers above, could hit ServiceNow stock quickly.
Investors will also watch how the on-prem timing effect shows up in Q3.
Keep an eye on ServiceNow stock into October 28.
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So what is ServiceNow stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
