ServiceNow (NYSE:NOW) Releases Quarterly Earnings Results, Beats Expectations By $0.04 EPS

ServiceNow (NYSE:NOW) posted its quarterly earnings results on Wednesday. The information technology services provider reported $0.90 EPS for the quarter, beating the consensus estimate of $0.86 by $0.04, FiscalAI reports. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. The business had revenue of $3.99 billion during the quarter, compared to analyst estimates of $3.93 billion.

ServiceNow Stock Down 6.4%

Shares of NOW stock traded down $6.57 during trading hours on Wednesday, reaching $95.50. 38,872,722 shares of the company’s stock were exchanged, compared to its average volume of 23,607,869. ServiceNow has a 1 year low of $81.24 and a 1 year high of $210.20. The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 0.13. The stock has a market cap of $98.46 billion, a PE ratio of 56.91, a PEG ratio of 1.75 and a beta of 0.96. The stock’s fifty day moving average price is $104.50 and its two-hundred day moving average price is $108.56.

Wall Street Analyst Weigh In

Several analysts have issued reports on NOW shares. Royal Bank Of Canada reaffirmed an “outperform” rating and set a $130.00 target price on shares of ServiceNow in a research report on Thursday, July 16th. JPMorgan Chase & Co. reduced their price target on ServiceNow from $195.00 to $145.00 and set an “overweight” rating for the company in a research report on Thursday, April 23rd. Canaccord Genuity Group dropped their price objective on ServiceNow from $200.00 to $145.00 and set a “buy” rating on the stock in a research report on Thursday, April 23rd. Citigroup reaffirmed a “buy” rating and set a $156.00 price objective (down from $158.00) on shares of ServiceNow in a research report on Wednesday, July 15th. Finally, Argus reduced their target price on shares of ServiceNow from $180.00 to $134.00 and set a “buy” rating for the company in a report on Friday, April 24th. One investment analyst has rated the stock with a Strong Buy rating, thirty-five have given a Buy rating, four have issued a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $139.12.

Key Stories Impacting ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Jefferies and other observers said ServiceNow could post solid Q2 results, with subscription revenue and cRPO potentially coming in above guidance and full-year outlook possibly raised on strong execution, early renewals, and AI-related demand.
• Positive Sentiment: ServiceNow announced new partnerships and AI integrations, including NinjaOne, Ciroos, and Esri, which could strengthen its platform by unifying IT operations, improving incident workflows, and adding location intelligence to enterprise processes.
• Positive Sentiment: Some analysts and market commentators argued the recent software selloff may have gone too far, with Morgan Stanley and others suggesting ServiceNow could rebound if earnings show AI is still driving demand rather than cannibalizing it.
• Neutral Sentiment: Investors are waiting for the company’s earnings update after the close, and options trading implies a sizable post-earnings move, highlighting how binary expectations are heading into the report.
• Negative Sentiment: CLSA initiated coverage with a bearish view and a low price target, adding to concerns that the stock may face more downside if growth or AI monetization disappoints.
• Negative Sentiment: Reports that OpenAI is pushing deeper into enterprise software increased fear that AI-native tools could pressure established workflow platforms like ServiceNow over time.
• Negative Sentiment: Weakness in peer software names, especially Pegasystems, also weighed on sentiment by reinforcing concerns that AI is changing purchasing behavior across the enterprise software sector.

Insider Activity at ServiceNow

In related news, insider Jacqueline P. Canney sold 8,927 shares of ServiceNow stock in a transaction that occurred on Friday, April 24th. The shares were sold at an average price of $89.60, for a total value of $799,859.20. Following the completion of the sale, the insider directly owned 29,531 shares in the company, valued at $2,645,977.60. This trade represents a 23.21% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Paul Fipps sold 1,048 shares of the business’s stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $98.51, for a total transaction of $103,238.48. Following the sale, the insider directly owned 12,072 shares in the company, valued at approximately $1,189,212.72. This represents a 7.99% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 28,071 shares of company stock valued at $2,529,956. Company insiders own 0.34% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the company. AlphaCentric Advisors LLC purchased a new stake in shares of ServiceNow in the 4th quarter valued at $25,000. Bank of Jackson Hole Trust raised its holdings in shares of ServiceNow by 534.6% during the fourth quarter. Bank of Jackson Hole Trust now owns 165 shares of the information technology services provider’s stock worth $25,000 after purchasing an additional 139 shares during the last quarter. Wealth Watch Advisors INC lifted its position in ServiceNow by 432.3% during the fourth quarter. Wealth Watch Advisors INC now owns 165 shares of the information technology services provider’s stock valued at $25,000 after purchasing an additional 134 shares during the period. Golden State Wealth Management LLC lifted its position in ServiceNow by 378.0% during the fourth quarter. Golden State Wealth Management LLC now owns 282 shares of the information technology services provider’s stock valued at $43,000 after purchasing an additional 223 shares during the period. Finally, Caitong International Asset Management Co. Ltd boosted its holdings in ServiceNow by 4,157.1% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 298 shares of the information technology services provider’s stock valued at $46,000 after purchasing an additional 291 shares during the last quarter. 87.18% of the stock is currently owned by hedge funds and other institutional investors.

ServiceNow Company Profile

ServiceNow (NYSE: NOW) is a cloud computing company that builds enterprise software to manage digital workflows and automate business processes. Its offerings are designed to replace manual work and legacy systems with cloud-based, service-oriented applications that support IT operations, customer service, human resources, security response and other enterprise functions.

The company’s flagship product family is the Now Platform, a suite of subscription software and platform services that includes IT Service Management (ITSM), IT Operations Management (ITOM), IT Business Management (ITBM), Customer Service Management (CSM), HR Service Delivery, Security Operations and Asset Management.