ServiceNow Jumps 4% on Guggenheim Upgrade to Buy

Guggenheim analyst John DiFucci upgraded ServiceNow (NYSE:NOW) from Neutral to Buy, setting a new price target of $125 per share. The upgrade came after the stock closed at $99.28 on Tuesday, driving shares up approximately 4% in Wednesday trading.

Rating Change

• Previous Rating: Neutral
• New Rating: Buy
• New Price Target: $125
• Previous Close: $99.28

Analyst Rationale

DiFucci believes current levels present an attractive opportunity for investors to purchase a comfortably profitable company. The price target is based on a 7.5x EV/NTM Recurring Revenue multiple, a premium compared to its SaaS peers, but one Guggenheim argues is worth paying.

Context

No other analyst ratings were mentioned in the report. ServiceNow has been relatively stable recently. The company is a leader in IT service management and workflow automation.

What This Means

While the upgrade reflects confidence in ServiceNow's growth and profitability, investors should consider risks such as SaaS competition and the stock's elevated valuation before making investment decisions.