ServiceNow stock dropped 10% in the past month but is considered a buying opportunity.

From Nasdaq: 2025-01-14 09:34:00

ServiceNow (NOW) shares have dropped 10% in the past month due to economic challenges, but this presents a buying opportunity. NOW’s strong GenAI portfolio and expanding client base have led to a 39.3% return in the last year, outperforming the sector and industry. The company had 2,020 customers with over $1 million in ACV in Q3 2024.

ServiceNow’s technical trend is bullish, trading above the 200-day moving average. The company’s expanding portfolio, leveraging AI and machine learning, is expected to reach a market size of $275 billion by 2026. NOW’s Gen AI capabilities have gained traction, with 44 new customers in Q3 2024 spending over $1 million in ACV.

ServiceNow’s partnership with major companies like Amazon, Microsoft, and NVIDIA, along with other industry players, is expected to boost its market share. Collaborations with AWS, Microsoft, and NVIDIA for AI-driven solutions have been announced. NOW aims to integrate Agentic AI for enhanced productivity in customer and IT service management.

The Zacks Consensus Estimate for NOW’s 2025 earnings is $16.42 per share, indicating an 18.42% year-over-year increase. Revenue estimates for 2025 stand at $13.19 billion, reflecting a 20.10% growth over 2024. NOW stock is trading at a premium, with a Value Score of F and a forward Price/Sales ratio of 15.74X.

ServiceNow’s robust GenAI portfolio and partnerships are expected to drive subscription revenues, justifying its premium valuation. With a Zacks Rank #1 and Growth Score of B, NOW offers a strong investment opportunity. The company’s focus on innovation and AI governance further enhances its growth prospects in the market.



Read more at Nasdaq: ServiceNow Declines 10% in a Month: Is the Stock a Buy on the Dip?