ServiceNow (NOW) Stock: Bank of America Sets $130 Price Target After Major Selloff

Key Takeaways

Table of Contents

Bank of America Securities launched coverage of ServiceNow (NOW) with a Buy recommendation and $130 price objective
Shares are hovering near $95, reflecting a roughly 38% decline year-to-date and 54% loss over 12 months
The price objective reflects 19x BofA’s enterprise value-to-free cash flow projection for calendar year 2027
Analysts argue ServiceNow will capitalize on AI trends rather than face disruption from them
Other Wall Street firms including Cantor Fitzgerald and Truist Securities maintain bullish views with targets of $122 and $120

ServiceNow (NOW) stock is changing hands around $95.07 following Bank of America’s initiation of coverage with a Buy recommendation and a $130 price objective issued on Monday.

ServiceNow, Inc., NOW

Shares have plunged approximately 38% year-to-date and have tumbled 54% during the trailing 12-month period, representing a steep decline from the 52-week peak of $211.48.

Bank of America’s $130 valuation is derived from applying a 19x multiple to the firm’s calendar year 2027 enterprise value-to-free cash flow forecast.

The investment bank characterized ServiceNow as maintaining a “mission-critical” role within enterprise workflow systems — the infrastructure that manages, directs, authorizes, and tracks activities throughout organizations.

This embedded presence within corporate operations represents ServiceNow’s fundamental competitive advantage, according to BofA. The firm contends that replacing the platform would prove prohibitively expensive and technically challenging for enterprises that depend on it.

Regarding artificial intelligence, BofA adopted a definitive position: ServiceNow is poised to benefit from the emergence of autonomous AI agents rather than face displacement. The bank views the company’s workflow foundation as ideally positioned to coordinate and manage AI operations spanning IT, workforce, and customer-facing processes.

ServiceNow maintains gross profit margins reaching 76.6%, based on InvestingPro figures. The company has delivered revenue expansion of 21.2% annually throughout the previous three years.

Wall Street Consensus

Bank of America’s optimistic outlook aligns with other major firms. Cantor Fitzgerald maintains an Overweight stance with a $122 price objective, whereas Truist Securities holds a Buy recommendation with a $120 target.

Both institutions have recently affirmed their assessments, pointing to ServiceNow’s strategic position in AI governance and coordination as primary catalysts.

The enterprise has remained aggressive on product development and strategic alliances. ServiceNow recently deepened its collaboration with Amazon Web Services to introduce new AI governance capabilities, building on AWS Marketplace transactions exceeding $1 billion for its solutions.

The company also unveiled Build Agent within ServiceNow Studio, an application that enables developers to create apps through natural language instructions. This functionality utilizes Anthropic models.

Contract Wins and Growth Indicators

NowVertical Group, a ServiceNow implementation partner, announced a three-year contract with a fintech enterprise spanning Argentina, Colombia, and Mexico, incorporating Google Cloud and AI technologies. The arrangement carries an estimated value of approximately $4 million.

ServiceNow’s market capitalization stands at roughly $98.3 billion. The stock’s P/E ratio currently registers at 56.81, exceeding the company’s ten-year median of 49.46.

GuruFocus GF Score metrics assign the company a rating of 72 out of 100, featuring a maximum 10/10 growth ranking and a financial strength assessment of 8/10.

Insider transactions have shown mixed signals. Throughout the most recent three-month window, one insider acquired approximately 28,682 shares, while other executives divested roughly $2.2 million in holdings.

The stock climbed about 5% on Monday in response to BofA’s coverage initiation.

✨ Limited Time Offer