/ServiceNow%20Inc%20building%20in%20Silicon%20Valley-by%20Sundry%20Photography%20via%20iStock.jpg)
With a market cap of $203.2 billion, ServiceNow, Inc. (NOW) provides cloud-based solutions that automate digital workflows through its AI-powered Now Platform, enhancing productivity and reducing costs across various enterprise functions like IT, HR, and customer service. Based in Santa Clara, California, the company serves global industries, including financial services, healthcare, technology, and government.
Shares of NOW have outperformed the broader market over the past 52 weeks. NOW stock has increased 28.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.3%. However, shares of NOW are down 7.2% on a YTD basis, lagging behind SPX's 4.1% gain.
In addition, ServiceNow has outpaced the Technology Select Sector SPDR Fund's (XLK) 19.2% return over the past 52 weeks.
Despite reporting better-than-expected Q4 2024 adjusted EPS of $3.67 and revenue of around $3 billion on Jan. 29, ServiceNow's stock tumbled 11.4% the next day due to weaker-than-expected 2025 subscription revenue guidance. The company projected 2025 subscription revenue of $12.6 billion - $12.7 billion, which marked a slowdown from the 22.5% growth in 2024. This softer outlook raised concerns about decelerating enterprise IT spending and macroeconomic uncertainty, which overshadowed the strong Q4 performance. Additionally, despite solid AI-driven adoption and a high renewal rate of 98%, investors focused on the moderating revenue growth trajectory.
For the current fiscal year, ending in December 2025, analysts expect NOW's EPS to grow 24% year-over-year to $8.93. The company's earnings surprise history is promising. It beat or met the consensus estimates in the last four quarters.
Among the 37 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 29 “Strong Buy” ratings, three “Moderate Buys,” four “Holds,” and one “Strong Sell.”
On Jan. 30, Morgan Stanley analyst Keith Weiss maintained a “Hold” rating on ServiceNow and set a $960 price target.
As of writing, NOW is trading below the mean price target of $1,153.56. The Street-high price target of $1,426 implies a potential upside of 43.4% from the current price levels.
