Stifel raises ServiceNow stock price target on deal momentum

Stifel increased its price target for ServiceNow stock (NYSE:NOW) to $160 from $120, maintaining a Buy rating. The current stock price of $136.08 is considered undervalued relative to its Fair Value estimate. The firm highlighted recent deal activity as a key driver, noting strong renewal expansion and adoption of advanced products despite some customer confusion around AI-infused offerings and pricing.

U.S. non-Department of Defense federal deals remained roughly flat year-over-year in the third quarter, but Stifel anticipates a significant U.K. public-sector win to offset potential federal challenges. The firm projects at least a 200 basis point increase in remaining performance obligations year-over-year in constant currency, aligning with management's expectations of accelerating consumption trends.

ServiceNow has reported 22% revenue growth over the past year, bolstering the optimistic outlook. Additional insights from InvestingPro include 13 exclusive tips and Pro Research Reports on ServiceNow and 1,400+ other U.S. equities. Recent moves by other analysts, such as Cantor Fitzgerald raising the price target to $174 and Needham to $155, underscore growing confidence in ServiceNow's AI strategy and business trajectory, particularly in light of significant federal contract wins and enterprise software procurement trends.