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ServiceNow shares get price target boost from TD Cowen on strong growth

EditorTanya Mishra
Published 07/25/2024, 09:38 AM
NOW
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TD Cowen has increased ServiceNow's (NYSE: NYSE:NOW) price target to $900 from $870, while reiterating a Buy rating on the stock, with the firm's analyst highlighting ServiceNow's impressive second-quarter performance, noting that the company's calculated Remaining Performance Obligations (cRPO) growth of approximately 22.5% on a constant currency basis exceeded the company's own guidance of 20.5%.

"NOW (ServiceNow) reported 2Q cRPO growth of ~22.5% cc, above the guide of 20.5%. 3Q cRPO guide of 22% cc was above Street at ~21.5% & FY24 rev guide was modestly raised," the analyst said on Thursday.

The positive outlook continued with the third-quarter cRPO guidance, which was set at 22% on a constant currency basis, surpassing the Street's expectations of around 21.5%. Furthermore, ServiceNow's revenue guidance for the fiscal year 2024 was modestly increased, signaling a robust financial trajectory, as per TD Cowen's analyst.

ServiceNow has been successful in consistently delivering top-tier performance amid challenging macroeconomic conditions. The company's new GenAI offerings have seen strong early adoption, which is a testament to their strategic initiatives and innovation.

"NOW (ServiceNow) is not only delivering consistent top-notch execution in a tough macro, but it is demonstrating strong early uptake of its new GenAI offerings. Based on customer ROI stories, momentum is likely just getting started," the analyst said.

The analyst from TD Cowen expressed a belief that ServiceNow's momentum is likely in its early stages, driven by compelling customer return on investment (ROI) stories, suggesting potential for continued growth and market penetration for the company's products and services.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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