Wall Street analysts’ views on ServiceNow
Earlier in this series, we looked at some aspects of ServiceNow’s (NOW) value proposition in the software industry in the United States. We explored the company’s position in the systems software space compared to those of its peers, including Microsoft (MSFT), IBM (IBM), and Red Hat (RHT), as of April 22, 2016.
We also looked at the forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiples of these players. Now, we’ll take a look at select market-centric views and metrics of ServiceNow.
Out of a total of 28 recommendations by Wall Street analysts, there were no “sell” recommendations for ServiceNow. Analysts’ recommendations for the stock were mostly “buys,” representing more than three-quarters of the total as of April 22, 2016. The remainder were “hold” recommendations.
ServiceNow’s price performance
ServiceNow’s stock price movement during the past month has been positive. As of April 22, the company’s stock has risen ~7.2%.
Analysts’ target prices
The Wall Street consensus target price for ServiceNow is $77.23 per share. The median target price was $75.50 as of April 22, 2016. ServiceNow’s closing price was $73.11 on the same date.
Joel Fishbein, an analyst with BTIG, reiterated a “buy” rating on ServiceNow’s stock and increased NOW’s price target to $85 from the previous $80. Shebly Seyrafi, an analyst with FBN Securities, increased ServiceNow’s stock price target to $90 from $80.
For diversified exposure to companies in the US telecommunications space, you may consider investing in the Technology Select Sector SPDR ETF (XLK). XLK has ~38% exposure to the application software space.