ServiceNow (NYSE:NOW) Shares Down 6% – Here’s What Happened

Shares of ServiceNow, Inc. (NYSE:NOW) were down 6% on Thursday. The stock traded as low as $101.80 and last traded at $102.2420. 24,677,442 shares traded hands during mid-day trading, an increase of 14% from the average session volume of 21,635,402 shares. The stock had previously closed at $108.81.

Key Stories Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: ServiceNow is broadening its agentic-AI partnership with LTM, aiming to take AI workflows to more enterprise customers. The company also highlighted deployments and selections by customers including LTM, KORE and Keysight, supporting its case that businesses are adopting its AI platform. ServiceNow expands enterprise AI partnerships
• Positive Sentiment: ServiceNow raised its AI contract-value target to $1.7 billion, and its CFO described fears that AI will disrupt the company’s business as unfounded. These points may help reassure investors about AI’s potential as a growth driver. ServiceNow Q3 earnings call highlights
• Neutral Sentiment: The NBA extended its partnership with ServiceNow, adopting EmployeeWorks for employee self-service and workplace requests. The deal adds a customer use case, though its near-term financial impact was not specified. NBA and ServiceNow extend partnership
• Negative Sentiment: Investors are focused on the outlook: despite a third-quarter revenue beat, ServiceNow’s fourth-quarter current remaining performance obligations growth forecast of 18.5% disappointed the market and prompted concerns about slowing backlog growth. The stock has fallen sharply since the report. ServiceNow outlook and AI concerns
• Negative Sentiment: ServiceNow is undertaking another round of layoffs, while third-quarter severance costs rose to $87 million from $24 million a year earlier. Separate reports that the board approved $127 million in retention awards as the company cuts jobs may also draw scrutiny over costs and priorities. ServiceNow layoffs and severance costs
• Negative Sentiment: ETFs were net sellers of $29.5 million in ServiceNow shares on Wednesday, adding a modest near-term headwind. ETF selling of ServiceNow shares

Wall Street Analyst Weigh In

NOW has been the topic of a number of research analyst reports. Canaccord Genuity Group set a $145.00 target price on ServiceNow in a report on Thursday, October 29th. Royal Bank Of Canada set a $165.00 price objective on shares of ServiceNow and gave the stock an “outperform” rating in a research note on Thursday, October 29th. Citigroup lowered their price objective on shares of ServiceNow from $170.00 to $157.00 and set a “buy” rating on the stock in a research note on Thursday, October 29th. Bank of America increased their target price on shares of ServiceNow from $130.00 to $150.00 and gave the company a “buy” rating in a research note on Wednesday, August 19th. Finally, KeyCorp restated an “underweight” rating and set a $110.00 target price (up from $85.00) on shares of ServiceNow in a report on Thursday, October 29th. One research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, three have issued a Hold rating and three have assigned a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average target price of $154.50.

ServiceNow Stock Performance

The company has a current ratio of 0.72, a quick ratio of 0.72 and a debt-to-equity ratio of 0.42. The firm has a market capitalization of $105.78 billion, a PE ratio of 73.32, a PEG ratio of 2.03 and a beta of 1.00. The firm’s fifty day moving average price is $136.31 and its 200 day moving average price is $114.81.

ServiceNow (NYSE:NOW) last posted its quarterly earnings data on Wednesday, October 28th. The information technology services provider reported $1.00 earnings per share for the quarter, missing the consensus estimate of $1.02 by ($0.02). The business had revenue of $4.11 billion for the quarter, compared to analyst estimates of $4.09 billion. ServiceNow had a return on equity of 15.17% and a net margin of 9.36%. ServiceNow’s revenue for the quarter was up 20.5% on a year-over-year basis. During the same period in the prior year, the firm posted $4.82 EPS. On average, research analysts anticipate that ServiceNow, Inc. will post 2.12 earnings per share for the current year.

Insider Buying and Selling

In other news, Director Paul Chamberlain sold 2,700 shares of the stock in a transaction on Thursday, August 27th. The stock was sold at an average price of $135.50, for a total value of $365,850.00. Following the transaction, the director owned 43,990 shares of the company’s stock, valued at $5,960,645. This represents a 5.78% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider Paul Fipps sold 2,034 shares of the company’s stock in a transaction that occurred on Monday, August 31st. The shares were sold at an average price of $147.87, for a total transaction 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. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 14,081 shares of company stock worth $1,937,904 in the last 90 days. Corporate insiders own 0.34% of the company’s stock.

Institutional Investors Weigh In On ServiceNow

Hedge funds have recently bought and sold shares of the company. Bank of Nova Scotia increased its stake in shares of ServiceNow by 53.3% in the first quarter. Bank of Nova Scotia now owns 1,018,036 shares of the information technology services provider’s stock valued at $106,436,000 after buying an additional 353,749 shares during the period. Sapient Capital LLC lifted its stake in shares of ServiceNow by 266.0% in the second quarter. Sapient Capital LLC now owns 77,661 shares of the information technology services provider’s stock worth $7,710,000 after acquiring an additional 56,444 shares during the period. Meeder Advisory Services Inc. acquired a new position in shares of ServiceNow in the second quarter worth approximately $2,881,000. Vestor Capital LLC lifted its stake in shares of ServiceNow by 38,987.2% in the first quarter. Vestor Capital LLC now owns 122,343 shares of the information technology services provider’s stock worth $12,791,000 after acquiring an additional 122,030 shares during the period. Finally, Cardano Risk Management B.V. boosted its holdings in ServiceNow by 6.9% in the second quarter. Cardano Risk Management B.V. now owns 484,785 shares of the information technology services provider’s stock valued at $48,129,000 after acquiring an additional 31,119 shares during the last quarter. 87.18% of the stock is currently owned by institutional investors and hedge funds.

About ServiceNow

ServiceNow, Inc provides cloud-based software that helps organizations manage digital workflows and automate business processes. Founded in 2004 by Fred Luddy, the company began with a focus on IT service management and has expanded its platform to support a range of enterprise operations.

Its products include tools for IT service and operations management, customer service, human resources, security, and application development. ServiceNow also offers artificial intelligence capabilities, including tools designed to help organizations automate tasks and find information across workflows.

ServiceNow serves businesses and public-sector organizations around the world.