ServiceNow (NYSE:NOW) Stock Falls 4.6% – Here’s Why

ServiceNow, Inc. (NYSE:NOW) fell 4.6% during mid-day trading on Friday. The stock traded as low as $139.94 and last traded at $141.7360. 15,454,637 shares traded hands during trading, a decline of 28% from the average daily volume of 21,595,588 shares. The stock had previously closed at $148.57.

ServiceNow News Summary

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Higher analyst price target: Piper Sandler raised its target for ServiceNow from $140 to $175 and maintained an “overweight” rating, citing potential upside from the company’s growth outlook.
• Positive Sentiment: AI product expansion: ServiceNow introduced the third generation of EmployeeWorks, enabling employees to build AI agents without coding. It also launched an Nvidia-backed “AI Passport” designed to govern agent permissions, business context and emergency controls. These products could support adoption of ServiceNow’s AI platform among enterprise customers. ServiceNow Stock Trending: Employees Build AI Agents with Nvidia Oversight
• Positive Sentiment: Supportive growth outlook: TD Cowen recently lifted its ServiceNow price target from $140 to $165 and reiterated a Buy rating, pointing to customer upgrades, security-product growth and demand from U.S. federal agencies as potential third-quarter drivers. ServiceNow stock rises as investors rotate to enterprise software stocks
• Neutral Sentiment: An investor letter from Emerald Wealth Partners argued that ServiceNow’s deep integration into enterprise systems could help protect its competitive position as AI adoption expands. How Deep System Roots Protect ServiceNow in AI Era
• Negative Sentiment: Sector-wide risk-off trading: Enterprise software stocks, including ServiceNow, Palantir and Salesforce, came under pressure as concerns spread that heavily financed AI investments may be difficult to sustain. This broader de-risking is currently dominating the stock-specific AI announcements. Enterprise Software Stocks Fall as AI Financing Worries Spread

Analysts Set New Price Targets

Several research analysts recently weighed in on NOW shares. Argus increased their target price on ServiceNow from $134.00 to $170.00 and gave the stock a “buy” rating in a research report on Wednesday, October 7th. Oppenheimer reissued an “outperform” rating and set a $165.00 price target (up from $140.00) on shares of ServiceNow in a research report on Tuesday. BMO Capital Markets boosted their price target on ServiceNow from $115.00 to $118.00 and gave the company an “outperform” rating in a research report on Thursday, July 23rd. Needham & Company LLC upped their price target on ServiceNow from $115.00 to $155.00 and gave the stock a “buy” rating in a research note on Friday, September 11th. Finally, Robert W. Baird raised their price objective on ServiceNow from $118.00 to $125.00 and gave the stock an “outperform” rating in a report on Thursday, July 23rd. One equities research analyst has rated the stock with a Strong Buy rating, thirty-five have given a Buy rating, four have given a Hold rating and two have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, ServiceNow presently has a consensus rating of “Moderate Buy” and a consensus price target of $151.73.

ServiceNow Stock Down 4.6%

The firm’s 50-day moving average price is $134.87 and its 200-day moving average price is $113.47. The company has a debt-to-equity ratio of 0.43, a current ratio of 0.70 and a quick ratio of 0.70. The company has a market cap of $146.56 billion, a price-to-earnings ratio of 88.58, a price-to-earnings-growth ratio of 2.57 and a beta of 0.99.

ServiceNow (NYSE:NOW) last posted its earnings results on Wednesday, July 22nd. The information technology services provider reported $0.90 earnings per share for the quarter, beating the consensus estimate of $0.86 by $0.04. ServiceNow had a net margin of 11.34% and a return on equity of 16.45%. The business had revenue of $3.99 billion for the quarter, compared to analyst estimates of $3.93 billion. During the same quarter in the previous year, the business posted $0.81 EPS. The business’s quarterly revenue was up 24.0% on a year-over-year basis. Sell-side analysts forecast that ServiceNow, Inc. will post 2.22 earnings per share for the current fiscal year.

Insider Activity at ServiceNow

In other news, insider Jacqueline P. Canney sold 7,847 shares of the company’s stock in a transaction dated Friday, August 28th. The stock was sold at an average price of $138.00, for a total value of $1,082,886.00. Following the completion of the sale, the insider owned 30,042 shares of the company’s stock, valued at $4,145,796. This represents a 20.71% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Paul Fipps sold 2,034 shares of the company’s stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $147.87, for a total value of $300,767.58. Following the completion of the sale, the insider directly owned 18,305 shares of the company’s stock, valued at $2,706,760.35. The trade was a 10.00% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 14,081 shares of company stock worth $1,937,904. Corporate insiders own 0.34% of the company’s stock.

Hedge Funds Weigh In On ServiceNow

Hedge funds and other institutional investors have recently bought and sold shares of the stock. Banque Pictet & Cie SA acquired a new stake in ServiceNow during the 3rd quarter valued at $1,333,000. James T. Borello RIA bought a new stake in shares of ServiceNow in the 3rd quarter valued at approximately $56,000. Fortitude Advisory Group L.L.C. acquired a new stake in shares of ServiceNow during the third quarter worth $340,000. Perpetual Ltd raised its stake in ServiceNow by 12.3% during the third quarter. Perpetual Ltd now owns 6,215 shares of the information technology services provider’s stock worth $833,000 after acquiring an additional 682 shares during the period. Finally, Moody National Bank Trust Division boosted its stake in ServiceNow by 3.9% in the third quarter. Moody National Bank Trust Division now owns 13,038 shares of the information technology services provider’s stock valued at $1,747,000 after acquiring an additional 484 shares during the period. 87.18% of the stock is owned by institutional investors and hedge funds.

ServiceNow Company Profile

ServiceNow, Inc is a cloud-based enterprise software company that helps organizations digitize, automate and manage workflows. Its platform connects people, processes and systems across departments, enabling businesses to replace manual, disconnected activities with standardized digital workflows.

The company’s products and services support a range of functions, including information technology service management, IT operations management, customer service, human resources, risk and security operations, and software development.