ServiceNow Suffers No 'Material Signs' Of Strain: Analysts

Shares of ServiceNow Inc (NYSE:NOW) climbed after the company Wednesday reported upbeat first-quarter results.

Here are some key analyst takeaways.

• JPMorgan analyst Mark Murphy reaffirmed an Overweight rating, while raising the price target from $970 to $1,020.
• Goldman Sachs analyst Kash Rangan maintained a Buy rating, while raising the price target from $1,050 to $1,150.

Check out other analyst stock ratings.

JPMorgan: ServiceNow's quarterly results did not reflect any "material signs of strain," providing a "welcome upside surprise in an uncertain environment," Murphy said in a note. The company's total revenue came in at $3.09 billion, up 18.5% year-on-year, driven by higher-than-expected subscription revenues of $3.01 billion.

ServiceNow modestly reduced its full-year subscription revenue growth outlook by 25 basis points to 19.5% in constant currency terms. However, he added that the US dollar guidance constitutes an upward revision by $5 million, reflecting lower-than-expected currency headwinds offset by "a slightly smaller magnitude of incremental macro-related conservatism."

Goldman Sachs: ServiceNow reported strong quarterly results, with "outperformance on all key metrics," reflecting "an exercise in prudence amid ongoing geopolitical uncertainty and potential Federal IT spending rationalization," Rangan said. What stood out in the quarter was the company's better-than-expected cRPO (current remaining performance obligation), which grew 22% in constant currency terms, he added.

Management left guidance broadly unchanged, which is "instilling investor confidence," the analyst stated. While concerns around Fed and tariff impacts are likely to continue, the combination of cRPO growth and 85% of revenues already contracted in backlog "leaves us constructive on the company's ability to at least achieve its Subs Revenue guide," he further wrote.

Price Action: Shares of ServiceNowhad risen by 14.47% to $930.26 at the time of publication on Thursday.

Read More:

• JPMorgan Says Investors May Be ‘Too Pessimistic’ On ServiceNow Ahead Of Earnings

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