ServiceNow Drops 2.92% Amid Analyst Downgrades

On April 3, 2025, ServiceNow's stock experienced a 2.92% drop in pre-market trading, reflecting investor sentiment and market dynamics.

Analysts have been adjusting their ratings and price targets for ServiceNow, with a mix of bullish and bearish perspectives. Brad Reback, for instance, significantly lowered his target price from $1175 to $950, citing increased uncertainty due to factors like government efficiency and tariffs. Despite this, he maintained a "buy" rating, highlighting the company's potential for long-term growth.

Several other analysts have also revised their price targets. Joel Fishbein from Truist Securities lowered his target to $950, while Rob Oliver from Baird reduced his to $1010. Gregg Moskowitz from Mizuho and Karl Keirstead from UBS also adjusted their targets downward, reflecting a more cautious outlook. However, some analysts, like Patrick Walravens from Citizens Capital Markets and David Hynes from Canaccord Genuity, maintained their bullish stance with targets of $1300 and $1275, respectively.

Despite the recent volatility, ServiceNow continues to demonstrate strong financial performance. The company's revenue growth rate of 21.34% over the past three months exceeds industry averages, and its net margin of 12.99% indicates effective cost management and profitability. Additionally, ServiceNow's return on equity (ROE) and return on assets (ROA) both surpass industry benchmarks, showcasing efficient use of shareholder equity and assets.

Insider trading activity has also been noted, with reports indicating that insiders were selling shares in the first quarter of 2025. This activity could be a signal of internal concerns or strategic moves, adding another layer of complexity to the stock's performance.