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ServiceNow Shares Rise After Oppenheimer Raises Price Target to $165

BullishMedium impact
NOW$139.01 −0.93%

ServiceNow, Inc. (NYSE:NOW) stock gained 1.46% to reach $142.40 after Oppenheimer boosted its price target on the enterprise software maker to $165 from $140 while maintaining an Outperform rating. The target increase comes alongside an earnings preview evaluating the company's contract growth and public sector demand.

Analyst research shows a mixed operational setup heading into upcoming earnings reports. Federal government obligations to ServiceNow totaled $424 million as of October 12, falling 16% below prior-year levels amid cautious government spending and slower seat growth. However, ServiceNow is anticipated to top third-quarter consensus figures for current remaining performance obligations (CRPO), which assume a $362 million quarter-over-quarter increase.

Looking ahead, fourth-quarter CRPO guidance could face headwinds from elevated artificial intelligence budget scrutiny, tougher annual comparisons, and front-loaded IT spending from earlier in the year. Wall Street expects fourth-quarter CRPO guidance near the consensus level of $15.3 billion, which represents 19% year-over-year growth.

Key points

  • Oppenheimer raised its ServiceNow price target from $140 to $165 while maintaining an Outperform rating.
  • ServiceNow stock climbed 1.46% to $142.40 following the updated analyst target.
  • Third-quarter federal obligations dropped 16% year-over-year to $424 million as of October 12.
  • Expectations point to a minor beat on third-quarter current remaining performance obligations.
  • Fourth-quarter growth faces scrutiny from tighter AI budget reviews and cautious federal spending.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

Why did ServiceNow stock go up today?

ServiceNow stock rose after Oppenheimer raised its price target on the company to $165 from $140 while keeping an Outperform rating.

What is the price target for ServiceNow?

Oppenheimer raised its ServiceNow price target to $165 from $140, citing expectations that the company will beat third-quarter contract growth targets.

What challenges is ServiceNow facing in the federal sector?

As of October 12, federal obligations were $424 million, down 16% from the prior year due to slower seat growth and cautious spending.