Analysts Stay Bullish on ServiceNow (NOW) After Earnings Report

ServiceNow, Inc. (NYSE:NOW) is one of the 10 Best AI Software Stocks to Buy Right Now. On January 30, Bernstein reiterated its Outperform rating on ServiceNow, Inc. (NYSE:NOW) with a price target of $219 after a sharp market sell-off.

Bernstein said that ServiceNow, Inc. (NYSE:NOW) now presents a “discount large cap growth” opportunity, pointing out that it appears relatively cheap compared with other large software companies with more than $50 billion in market cap when looking at the three-year growth against the price-to-free-cash-flow. The firm also noted that the usual premium given to growth stocks has “collapsed further,” which makes ServiceNow, Inc.’s (NYSE:NOW) even wider when compared to other large-cap growth software stocks.

On January 29, Cantor Fitzgerald also maintained its Overweight rating on ServiceNow, Inc. (NYSE:NOW) with a price target of $200 after the company’s quarterly earnings report.

Also on January 29, Stifel reduced its price target on ServiceNow, Inc. (NYSE:NOW) from $200 to $180 but kept its Buy rating following the company’s latest quarterly results, which led the stock to fall in after-hours trading.

Stifel analyst Brad Reback pointed out that the quarter “played out largely as expected,” with an organic upside of around 100 basis points. He noted that fourth-quarter checks were “somewhat mixed.”

The research firm noted that ServiceNow, Inc. (NYSE:NOW) offers “an interesting value” at current levels, trading at about 6 times revenue and 16 times free cash flow. However, Stifel highlighted that a broader shift in investor sentiment would be needed for the stock to be re-rated, and said that “what drives that shift remains unclear.”

ServiceNow, Inc. (NYSE:NOW) is an American software and technology company. It provides an AI platform that helps organizations digitize, automate, and manage workflows for enterprise operations.

While we acknowledge the potential of NOW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.