On Tuesday, TD Cowen demonstrated a positive outlook on shares of ServiceNow (NYSE: NYSE:NOW), raising its price target to $1,300 from the previous $1,025, while reiterating a Buy rating.
The firm also spotlighted ServiceNow as a Best Idea for 2025, suggesting a strong future performance for the company. The stock has already demonstrated remarkable momentum, delivering a 60% return over the past year and currently trading near its 52-week high of $1,137.
According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with 18 additional exclusive insights available to subscribers.
The optimism from TD Cowen is based on ServiceNow's introduction of new AI-driven products. According to the firm, ServiceNow is just beginning to tap into the potential of a new artificial intelligence product cycle with its Pro+ offering.
The early 2025 launches of Workflow Data Fabric and RaptorDB Pro are anticipated to further enhance ServiceNow's capabilities in Agentic AI Network and open up new opportunities for monetization. With impressive gross profit margins of 79% and robust revenue growth of 23.5%, the company has demonstrated strong execution capabilities.
The analyst pointed out that these innovations are set to propel ServiceNow into a new phase of AI-driven growth. With these developments, ServiceNow is expected to leverage artificial intelligence to provide more sophisticated solutions and services.
As a $232 billion market cap company, ServiceNow has established itself as a prominent player in the software industry. For detailed analysis and comprehensive insights, access the full ServiceNow Pro Research Report on InvestingPro, covering key metrics and growth prospects.
ServiceNow's growth is not solely attributed to its AI initiatives. The firm also recognizes the company's increasing presence in the front-office space and the acceleration of its sales capacity growth. These factors are seen as additional drivers that will contribute to the company's success in the coming year.
TD Cowen's heightened price target reflects a strong conviction in ServiceNow's trajectory, backed by the company's strategic advancements in AI and its expanding market influence. The designation of ServiceNow as a Best Idea for 2025 suggests that the firm sees significant room for the stock to appreciate over the next couple of years.
In other recent news, ServiceNow has been the recipient of increased stock price targets from financial firms Needham and Scotiabank (TSX:BNS), both maintaining a positive outlook on the company.
Needham raised its target from $1,075 to $1,150, while Scotiabank initiated coverage with a target of $1,230, both firms emphasizing ServiceNow's potential for growth. This comes on the heels of ServiceNow's third-quarter results, which showcased a 22.5% year-over-year increase in subscription revenue, reaching $2.715 billion.
ServiceNow's recent developments include the deepening of its strategic alliance with Microsoft (NASDAQ:MSFT), integrating its AI agent with Microsoft Copilot to enhance front-office business processes. Furthermore, the company has revised its full-year 2024 subscription revenue forecast upwards to between $10.655 billion and $10.66 billion.
Analyst firms Mizuho (NYSE:MFG) Securities, Piper Sandler, and Stifel have also raised their price targets for ServiceNow, reflecting confidence in the company's growth trajectory. This confidence stems from ServiceNow's robust performance and the success of its GenAI technology, particularly the Now Assist tool, in securing high-value contracts.
ServiceNow's recent developments include extended collaborations with industry leaders NVDA and SNOW, the appointment of Amit Zavery as President, COO, and CPO, and continued operations in the federal sector despite potential concerns arising from its partnership with Carahsoft. These developments are part of ServiceNow's ongoing strategy as it targets a trajectory towards $30 billion in revenue.
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