Following its Q3 results and future forecasts coming in ahead of market expectations, ServiceNow Inc. (NOW, Financial) had strong responses from analysts, which drove a pre-market stock increase of 1%. Key elements driving the company's "solid beat and raise quarter," analysts noted, were its strong execution and client demand.
Maintaining a $1,075 price target and a Buy rating, BofA highlighted ServiceNow's expansion in customer and staff workflow solutions. The company observed that showing sustainable development, the current Remaining Performance Obligation (cRPO) increase of 23.5% exceeded its 22% expectation. The bank also said that strong customer resonance from ServiceNow's efforts in important areas is paying off.
Morgan Stanley, meantime, confirmed its equal-weight rating with a $960 target, noting the company's strong generative artificial intelligence posture. Analyzers pointed out, nonetheless, a slowing down in cRPO growth relative to Q2 and suggested a possible slowing down in Q4. Still, they underlined ServiceNow's strong foundation for monetizing generative artificial intelligence solutions by 2025.
Following in line, Stifel and RBC raised their price estimates to $990 and $1,045, respectively. Praising the company's platform strength, rising acceptance of ProPlus and Now Assist, and its recently launched Workflow Data Fabric, RBC called Q3 a "Home Run Of A Quarter."
Q3 results of ServiceNow and future direction highlight its strong position in important growth sectors, including government contracts and generative artificial intelligence, which analysts feel will propel momentum into 2025.
