ServiceNow (NOW) Stock Rising, Upgraded at Mizuho

ServiceNow (NOW) stock was upgraded to 'buy' from 'neutral' at Mizuho Friday morning.
By Annie Palmer ,

NEW YORK (TheStreet) -- Shares of ServiceNow (NOW) - Get Report are increasing 1.01% to $70.87 in late morning trading as Mizuho upgraded its rating for the Santa Clara, CA-based cloud computing service to 'neutral' from 'buy' Friday morning. 

The firm raised its price target  to $85 from $15. 

Mizuho Analyst Abhey Lamba said he's certain that ServiceNow will be able to execute its projected plans of $4 billion in revenue and nearly 30% free cash flow margin, Barron's reports. 

The firm is confident that ServiceNow will exceed expectations when it reports second quarter earnings on July 27. 

Despite ServiceNow's faulty introduction into IT service management, Mizuho said it believes the company is positioning itself to remain a dominant player in the market. 

"In terms of TAM, while initiatives may take some time to yield results, we think management's strategy of expanding beyond core IT use cases to drive deeper penetration of its installed base across buying centers is likely to yield results," the firm continued in an analysts note.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate SERVICENOW INC as a Sell with a ratings score of D. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

You can view the full analysis from the report here: NOW

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