22 hours ago
1
Chris MacDonald
Wed, April 1, 2026 astatine 9:45 AM CDT 4 min read
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Benchmark initiated sum of ServiceNow (NOW) with a Buy standing and $125 terms target, arguing that a 50% selloff has created a compelling introduction constituent arsenic the company’s AI monetization accelerates contempt its cardinal strength.
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ServiceNow’s 98% renewal rate, 25% YoY maturation successful remaining show obligations, and beardown escaped currency travel procreation suggest that the stock’s valuation disconnect from fundamentals presents a patient, semipermanent buying accidental for investors who tin tolerate near-term volatility.
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Benchmark expert Yi Fu Lee initiated sum of ServiceNow (NYSE:NOW) with a Buy standing and a $125 terms target, arguing that a prolonged selloff has created a compelling introduction constituent for semipermanent investors. ServiceNow banal has fallen -50.42% from its January 2, 2025 terms of $210.87 to a caller $104.55, good beneath its 52-week precocious of $211.48. The thesis: the selloff has disconnected terms from fundamentals astatine a infinitesimal erstwhile the company's AI monetization is accelerating.
| NOW | ServiceNow | Benchmark | Initiation | Buy | $125 |
Benchmark sees ServiceNow arsenic good positioned to payment from the Agentic AI supercycle, with the platform's integration of AI, data, security, and automated workflows creating durable endeavor value. The steadfast points to beardown enactment nether CEO Bill McDermott arsenic a cardinal pillar supporting semipermanent profitable growth. McDermott himself extended his committedness to the institution done 2030, and connected the Q4 net telephone declared: "This is simply a $1 trillion institution successful the making. I can't fathom a amended introduction constituent for what ServiceNow is building."
The underlying numbers enactment the conviction. In Q4 FY2025, Now Assist nett caller ACV much than doubled year-over-year, and 244 transactions exceeded $1M successful nett caller ACV, representing astir 40% YoY growth. Full-year escaped currency travel reached $4.576 billion, up 34% year-over-year.
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ServiceNow is an endeavor unreality level that automates integer workflows crossed IT, security, HR, and lawsuit operations. The institution closed FY2025 with $13.278 cardinal successful revenue, up 21% year-over-year, and guided for $15.53 cardinal to $15.57 cardinal successful subscription gross for 2026. Current remaining show obligations stood astatine $12.85 billion, up 25% year-over-year, providing beardown guardant gross visibility. The institution counts implicit 8,800 customers and maintains a 98% renewal rate.
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