ServiceNow (NYSE:NOW) Shares Gap Up on Better-Than-Expected Earnings

ServiceNow, Inc. (NYSE:NOW)’s stock price gapped up prior to trading on Thursday following a better than expected earnings announcement. The stock had previously closed at $95.46, but opened at $100.01. ServiceNow shares last traded at $97.0110, with a volume of 13,222,877 shares changing hands.

The information technology services provider reported $0.90 earnings per share for the quarter, topping the consensus estimate of $0.86 by $0.04. The firm had revenue of $3.99 billion during the quarter, compared to the consensus estimate of $3.93 billion. ServiceNow had a net margin of 11.34% and a return on equity of 16.45%. The company’s revenue was up 24.0% on a year-over-year basis. During the same quarter last year, the company earned $0.81 earnings per share.

ServiceNow News Summary

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow’s Q2 results showed robust growth, with revenue up about 24% year over year and subscription revenue accelerating, reinforcing that demand for its platform remains strong. Article Title
• Positive Sentiment: Management raised guidance and highlighted AI momentum, including AI contract value topping $1 billion and expanding enterprise adoption, which supports the case for continued growth. Article Title
• Positive Sentiment: Several analysts raised or reaffirmed bullish ratings and price targets after earnings, reflecting renewed confidence in ServiceNow’s outlook and valuation upside. Article Title
• Positive Sentiment: New partnerships and channel expansions, including deals with Experian, TeamViewer, and Exclusive Networks, suggest broader adoption of ServiceNow’s AI and cybersecurity offerings. Article Title
• Neutral Sentiment: Investors are also watching mixed signals from insider and institutional trading, with some large funds trimming positions even as others add shares; this appears more like portfolio rebalancing than a clear fundamental warning. Article Title
• Negative Sentiment: Despite the earnings beat, some commentary says the stock’s rally may be vulnerable if AI disruption fears return, especially around usage-based pricing and long-term software demand. Article Title

Wall Street Analysts Forecast Growth

NOW has been the topic of a number of analyst reports. JPMorgan Chase & Co. boosted their target price on shares of ServiceNow from $145.00 to $150.00 and gave the company an “overweight” rating in a report on Thursday. Mizuho reduced their price target on ServiceNow from $150.00 to $140.00 and set an “outperform” rating for the company in a research report on Thursday, April 23rd. Needham & Company LLC reiterated a “buy” rating and set a $115.00 price objective on shares of ServiceNow in a research note on Thursday. The Goldman Sachs Group reiterated a “buy” rating and set a $145.00 price objective (down from $163.00) on shares of ServiceNow in a research note on Wednesday, July 8th. Finally, Royal Bank Of Canada reissued an “outperform” rating and set a $130.00 price objective on shares of ServiceNow in a report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, two have issued a Hold rating and three have given a Sell rating to the company. According to MarketBeat, ServiceNow currently has a consensus rating of “Moderate Buy” and an average price target of $143.39.

Insider Transactions at ServiceNow

In other news, Director Anita M. Sands sold 16,445 shares of the company’s stock in a transaction on Thursday, May 14th. The shares were sold at an average price of $90.14, for a total value of $1,482,352.30. Following the transaction, the director owned 30,090 shares of the company’s stock, valued at approximately $2,712,312.60. This represents a 35.34% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, insider Paul Fipps sold 1,048 shares of the stock in a transaction on Monday, May 18th. The stock was sold at an average price of $98.51, for a total value of $103,238.48. Following the completion of the sale, the insider owned 12,072 shares in the company, valued at $1,189,212.72. This trade represents a 7.99% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders have sold 19,144 shares of company stock valued at $1,730,097. 0.34% of the stock is currently owned by company insiders.

Institutional Trading of ServiceNow

A number of large investors have recently modified their holdings of NOW. Vanguard Group Inc. lifted its position in ServiceNow by 404.5% during the fourth quarter. Vanguard Group Inc. now owns 101,963,384 shares of the information technology services provider’s stock valued at $15,619,771,000 after purchasing an additional 81,752,460 shares during the last quarter. State Street Corp increased its holdings in shares of ServiceNow by 406.6% in the 4th quarter. State Street Corp now owns 47,896,597 shares of the information technology services provider’s stock worth $7,337,280,000 after buying an additional 38,441,898 shares during the last quarter. Price T Rowe Associates Inc. MD raised its position in shares of ServiceNow by 371.0% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 32,395,663 shares of the information technology services provider’s stock valued at $4,962,692,000 after buying an additional 25,517,218 shares in the last quarter. Geode Capital Management LLC raised its position in shares of ServiceNow by 404.8% during the 4th quarter. Geode Capital Management LLC now owns 23,512,428 shares of the information technology services provider’s stock valued at $3,591,425,000 after buying an additional 18,854,775 shares in the last quarter. Finally, Morgan Stanley lifted its holdings in shares of ServiceNow by 335.6% during the 4th quarter. Morgan Stanley now owns 22,733,483 shares of the information technology services provider’s stock worth $3,482,543,000 after acquiring an additional 17,514,679 shares during the last quarter. Institutional investors own 87.18% of the company’s stock.

ServiceNow Price Performance

The business’s fifty day moving average price is $104.77 and its 200-day moving average price is $107.70. The company has a market capitalization of $101.83 billion, a P/E ratio of 61.73, a P/E/G ratio of 1.54 and a beta of 0.96. The company has a current ratio of 0.70, a quick ratio of 0.84 and a debt-to-equity ratio of 0.43.

ServiceNow Company Profile

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.