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- 1 NOW stock price: The shares have experienced a bullish trend since the start of this year.
- 2 The company is making revenue growth with a CAGR of over 20%.
- 3 The current stock trend is sideways, but the analysts have given bullish target prices.
In recent reports by Bloomberg, Famous names in the Asset management industry have covered the IT giant (NYSE: NOW). Guggenheim analysts have increased their share price targets of NOW to $657 and provided a “Long” rating for the stock. Meanwhile, HSBC predicted coverage on the shares of ServiceNow, giving a “BUY” rating and a $704 target price on the NOW stock price.
At last, Barclays has a different view. They have rated the stock as bearish while decreasing the target price from $ 646 to $644. Combined, 31 analysts have given the firm a “long” rating, with an average rating of “Moderate buy”.
Why are the Analysts Bullish?
Most analysts are bullish, and the reason is simple: any company will always reflect its fundamentals in the long run. Looking at the financials of this firm, the future is looking bright. The company is reporting revenue growth with a compounded annual growth rate (CAGR) of 20.3%. It means that every 3.5 years, the company is doubling its sales!
With such extraordinary sales growth, the management is also taking away net profits, which is commendable as usually, for such sales growth, companies burn a lot of cash in their operations. The profitability ratios, on the other hand, are also raging. The return on equity for the current period is over 25%, while the return on assets is 10.9%.
The consequences of growth
When a listed company takes off like this, the whole world gets on its tail. The growing profits have made the stock overvalued in an already overvalued sector of IT. The Earnings per share (EPS) of the NOW stock price is $6.9 while its Price is 78.7 times that of its EPS.
Technical Analysis and Prediction of the NOW Stock Price
At the time of this writing, The NOW stock price is trading at $560 after the bears have reclaimed the resistance level of $603. The immediate support to the bulls is at $532, where some buying is seen.
The RSI is in its neutral territory of 48, while the 50-day moving average is $562. The bullish trend was broken when the stock couldn’t go past the $603 resistance, indicating the bears have a hold on that level. The price prediction as per the current situation will be bullish till the immediate resistance of $603. If the bulls can break past it, then the next target will be $655
Conclusion
ServiceNow (NYSE: NOW) is making consistent revenue growth, upon which it has been in the limelight, covered by many AMCs. This coverage and growth have also made the stock overvalued. The current trend is sideways, but the price prediction is bullish.
Technical Levels
Support: $532, and $484
Resistance: $603, and $655
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
