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ServiceNow: No ‘Sell’ Recommendations

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Dec. 4 2020, Updated 10:53 a.m. ET

Stock returns

ServiceNow stock has generated impressive returns despite the recent pullback in the share price. The stock fell 8% in 2016 and rose 69% in 2017. Since the beginning of 2018, the stock has gained ~31% despite a 13% decline in October.

ServiceNow stock has gained 37% in the last 12 months. The stock has risen 111% in the last three years and close to 214% in the last five years.

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Analysts’ recommendations

Of the 34 analysts tracking ServiceNow, 30 recommended a “buy,” four recommended a “hold,” and none of the analysts recommended a “sell.” Analysts’ 12-month average target price for ServiceNow is $209.52, while the median estimate is $210. ServiceNow is trading at a discount of 23% to analysts’ median estimate.

Analysts think that the stock is a good “buy” due to its strong revenue growth and expanding bottom line. The company’s sales are estimated to rise 34% in 2018 and 29% in 2019.

ServiceNow’s EPS might grow 96% in 2018, 35% in 2019, and at a compound annual growth rate of 52% over the next five years.

Moving averages

On October 24, ServiceNow closed the trading day at $170.21. Based on that price, the stock was trading as follows:

  • 8.6% below its 100-day moving average of $186.32
  • 10% below its 50-day moving average of $189.51
  • 8% below its 20-day moving average of $184.94

MACD and RSI

ServiceNow’s 14-day MACD (moving average convergence divergence) is -4.26. A stock’s MACD is the difference between its short-term and long-term moving averages. ServiceNow’s negative MACD score indicates a downward trading trend.

ServiceNow has a 14-day RSI (relative strength index) score of 38, which shows that the stock is trading closer to the “oversold” territory. An RSI score above 70 indicates that a stock has been overbought, while an RSI score below 30 indicates that a stock has been oversold.

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