With a market cap of $153 billion, ServiceNow, Inc. (NOW) is a leading provider of cloud-based digital workflow solutions that help organizations automate and streamline business operations across industries worldwide. The company offers a comprehensive portfolio of products spanning IT services, customer service, security, risk management, human resources, and workflow automation, enabling enterprises to improve efficiency and enhance user experiences.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Salesforce fits this criterion perfectly. Headquartered in Santa Clara, California, ServiceNow serves customers globally and continues to expand its capabilities through innovation, strategic partnerships, and AI-driven solutions.
Shares of the Santa Clara, California-based company have dipped 26.9% from its 52-week high of $194.73. Over the past three months, shares of the company have risen 4.8%, lagging behind the State Street SPDR S&P Software & Services ETF’s (XSW) 8.4% return during the same period.
The technology giant's stock has declined 7.1% on a YTD basis, underperforming XSW’s 8.6% increase. In the longer term, shares of ServiceNow have dropped 22.4% over the past 52 weeks, compared to XSW's 6.5% gain over the same time frame.
Yet, the stock has been trading above its 50-day moving average since mid-May.
ServiceNow has underperformed over the past year due to concerns that AI could disrupt traditional IT software spending and threaten its seat-based pricing model. Aggressive acquisitions, heavy AI and cybersecurity investment, and elevated stock-based compensation have also increased concerns about margin pressure and earnings quality.
In comparison, rival Salesforce, Inc. (CRM) has performed better than NOW stock. CRM stock has decreased 3.2% on a YTD basis and gained marginally over the past 52 weeks.
Despite NOW stock’s underperformance over the past year, analysts are strongly optimistic about its prospects. It has a consensus rating of “Strong Buy” from the 45 analysts covering the stock, and the mean price target of $144.78 suggests a marginal premium to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.