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Valued at a market cap of $175.3 billion, California-based ServiceNow, Inc. (NOW) operates in the cloud computing sector. The company provides a comprehensive platform that enhances productivity across various enterprise departments by streamlining processes and leveraging advanced technologies.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and ServiceNow fits this criterion perfectly. Renowned for its end-to-end digital workflow automation, ServiceNow excels in unifying diverse IT and non-IT processes into a single, streamlined solution through advanced AI and machine learning.
However, the software maker is down marginally from its 52-week high of $857.25, achieved on Aug. 30. Despite this, shares of NOW have surged 32.9% over the past three months, significantly outperforming the broader Nasdaq Composite's ($NASX) 5.8% gains in the same period.
In the longer term, NOW is up 21% on a YTD basis, overshadowing NASX's 18% gains. Shares of ServiceNow have increased 47.7% over the past 52 weeks, compared to NASX's 27% return over the same time frame.
NOW has been trading above its 200-day and 50-day moving average since last year despite some recent fluctuations, indicating a bullish price trend.
ServiceNow has outperformed by leveraging advanced AI integrations into its core products, which has enhanced its operational efficiency and product offerings. The company's strategic focus on expanding into the CRM market has also contributed to its success.
Moreover, the stock surged 13.4% on Jul. 25 following its Q2 earnings report, which revealed adjusted EPS of $3.13 on sales of $2.6 billion, beating Wall Street estimates. The company also reported a 23% increase in subscription revenues and closed 88 high-value deals. Additionally, optimistic forward guidance on sales growth, operating margins, and the strategic integration of generative AI contributed to increased investor confidence.
Also, its rival, Salesforce, Inc. (CRM), has underperformed compared to NOW, with its shares gaining 19.3% over the past 52 weeks and experiencing a 3.9% YTD decline.
Given NOW's strong price action, analysts remain optimistic about its prospects. With 33 analysts covering the stock, there is a consensus rating of "Strong Buy." The company’s mean price target of $871.81, indicates an expected upside of nearly 2% from current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
