Analyst Michael Turrin from Wells Fargo maintained a Buy rating on ServiceNow (NOW – Research Report) and keeping the price target at $900.00.
Michael Turrin has given his Buy rating due to a combination of factors surrounding ServiceNow’s technological platform and strategic positioning. He highlights the company’s potential to leverage its established presence in IT to create a new ‘mega-market’ in the middle-office software space. This opportunity is likened to existing significant markets like CRM and ERP/HCM, indicating a substantial growth avenue. Turrin also notes the company’s success in expanding the IT Service Management (ITSM) Total Addressable Market (TAM) with expectations of further enterprise standardization on ServiceNow’s offerings, pointing to a strong future revenue stream.
Additionally, Turrin’s optimism is bolstered by ServiceNow’s performance across all four workflow categories, which are approaching or have surpassed the $1 billion run-rate mark. He sees the next big growth area within ERP workflows, especially with upcoming S4/HANA migrations, which could benefit finance and supply chain workflows. With the upcoming analyst day viewed as a potential positive catalyst and the projection of significant subscription revenue targets, the Buy rating is further justified. Turrin’s valuation considers the company’s premium position, but he maintains it as warranted given ServiceNow’s role as a defining entity within its category and its robust growth profile.
In another report released on April 26, Barclays also assigned a Buy rating to the stock with a $890.00 price target.
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ServiceNow (NOW) Company Description:
Founded in 2004 and based in California, ServiceNow, Inc. is a software company which provides enterprise cloud computing solutions to help companies manage digital workflows for enterprise operations. The company offers its solutions to various sectors including healthcare, education, oil and gas, telecommunications, government, consumer products, technology, IT and financial services.
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