On Thursday, BMO Capital Markets adjusted its outlook on ServiceNow (NYSE: NYSE:NOW), increasing the stock's price target to $860 from the previous $830, while sustaining an Outperform rating on the shares.
The firm's analyst cited ServiceNow's recent performance, noting the company had a strong quarter, which was particularly evident in the growth of Contracted Remaining Performance Obligations (CRPO), revenue, and margins. ServiceNow's CRPO saw a year-over-year constant currency growth of 22.5%, surpassing the guidance by 2 percentage points.
The analyst also mentioned positive feedback from channels indicating that the pipeline for ServiceNow's Plus product is expanding. Despite expressing concerns over recent sudden executive changes, including a notable departure, the analyst expressed confidence in ServiceNow's robust team depth.
In other recent news, ServiceNow has been exceeding expectations with its financial performance, posting a significant growth in subscription revenue, CRPO, and operating margin.
Major financial firms including Baird, Piper Sandler, RBC Capital, and Canaccord Genuity have responded positively to these developments, raising their price targets for the company. Baird, in particular, has increased its price target to $900, while maintaining an Outperform rating on the stock.
ServiceNow has also been successful in securing large deals, with 11 deals over $1 million, including two surpassing $5 million. The company's GenAI technology has been influential in these achievements. In addition, ServiceNow recently acquired Raizen to enhance its Gen AI-powered search and knowledge management.
Despite the departure of key executives, ServiceNow assures that no current U.S. Federal deals are in jeopardy. Analysts from Piper Sandler, RBC Capital, and Canaccord Genuity have expressed confidence in ServiceNow's trajectory, suggesting that the company's performance and market position are likely to result in continued outperformance.
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