ServiceNow Shares Climb as Analysts Raise Their Price Targets

ServiceNow shares are higher on Thursday. Several analysts raised their price targets after the cloud-software company swung to a profit and forecast higher sales.
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ServiceNow  (NOW) - Get Report shares are higher after analysts raised their price targets, citing the cloud-software company's swing to a first-quarter profit and forecast of higher sales.

Shares of the Santa Clara, Calif., company at last check were up 9.5% to $352.61.

ServiceNow reported net income of $48.2 million, or 24 cents a share, compared with a loss of $1.6 million, or 1 cent, in the year-earlier quarter.

Revenue totaled $1.05 billion, up 33% from a year earlier. ServiceNow said subscription revenue will total as much as $1.01 billion in the second quarter.

Barclays analyst Raimo Lenschow raised his share-price target for ServiceNow to $380 from $325, telling clients in a research note that he expects the shares to rally.

"The strong beat across the board in Q1, along with management commentary around a healthy start to Q2 gives us confidence that ServiceNow will be relatively more resilient to the covid-19 crisis vs. other software vendors," said Lenschow, who reiterated his overweight rating.

"More importantly, we like management’s thorough approach to fiscal 2020 guidance, which should set up a nice beat and raise story in the coming quarters."

Bernstein analyst Zane Chrane, who has an outperform rating on the stock, raised his share-price target by $36 to $410, noting the company's strong subscriptions billing and “robust” non-cancelable backlog, giving the firm “strong visibility into their future.”

Raymond James analyst Michael Turits raised his price target to $385 a share from $330, pointing to strong business momentum “even through the end of March and with April linearity trending better than last year."

Piper Sandler analyst Rob D. Owens raised his price target for ServiceNow to $360 from $310, but lowered his rating to neutral from overweight, saying "upside is limited" and "investors should be prudent given the current pandemic."