Investment Coverage Initiated

Analyst: Raymond James
Company: ServiceNow Inc (NYSE:NOW)
Rating: Outperform
Price Target: $1,200

Raymond James has initiated coverage of ServiceNow Inc with an "outperform" rating, setting a price target of $1,200 due to the company’s strong growth prospects and potential in artificial intelligence monetization.

Strong Growth Prospects

The brokerage emphasized ServiceNow's capacity to maintain over 20% growth at a revenue scale of $10 billion. This growth trajectory shows similarities to established software giants such as Microsoft (NASDAQ:MSFT), Salesforce (NYSE:CRM), and Adobe (NASDAQ:ADBE).

AI and New Solutions

According to Raymond James, AI opportunities, including Generative AI and innovations like Workflow Data Fabric, could enhance incremental revenue. These advancements may help solidify ServiceNow's status as a data system of record.

Long-Term Growth Durability

ServiceNow's efforts to diversify into customer and employee workflows, paired with high client retention and expansion rates, underscore its long-term growth durability.

Valuation Details

The firm has assigned a valuation of 16 times the estimated 2026 revenue, demonstrating confidence in ServiceNow’s blend of high growth and strong cash flow margins.