Goldman Sachs Reiterates Buy Rating on ServiceNow (NOW)

Goldman Sachs analyst Kash Rangan reiterated a Buy rating and $1,200.00 price target on ServiceNow (NYSE: NOW).

The analyst comments "ServiceNow announced today that it has agreed to acquire the AI assistant company Moveworks. ServiceNow is -6% (vs. NASDAQ -3%) intraday as investors react to the $2.85B price tag (mix of cash and stock) and, following sub-20% Subscription Revenue guidance, the deal could raise questions about whether ServiceNow's AI strategy needs a fix. In our view, the AI market is dynamic and companies need to balance in-house innovation with making meaningful acquisitions. We see strategic merit in the proposed acquisition, as we think it would complement ServiceNow's Now Assist offerings, with front-end automations for Sales, CRM, Finance, and HR (particularly their push deeper into the CRM market). We believe a successful deal would improve the long-term sustainability of 20% growth augmented by scaling AI revenue contribution."

For an analyst ratings summary and ratings history on ServiceNow click here. For more ratings news on ServiceNow click here.

Shares of ServiceNow closed at $850.63 yesterday.

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