ServiceNow (NOW) Stock Forecast & Price Target

ServiceNow Inc. has experienced notable user growth, with its customer base reportedly doubling over the past two years, suggesting a compound annual growth rate (CAGR) of approximately 40%. The company's expansion into AI-driven solutions, particularly through the integration of Moveworks, positions it favorably within the IT service management space, as it enhances employee experience and operational efficiencies. Moreover, Moveworks' FedRAMP certification supports ServiceNow's advancements in the public sector, which constitutes about 10-15% of its revenue, contributing to a bullish outlook for sustained growth and profitability.

ServiceNow faces a host of macroeconomic and microeconomic risks, along with increased competition that could hinder its financial performance and lead to declining share value. Concerns were raised following a disappointing Q4 performance and a guidance for 2025 that appeared heavily weighted towards the later half, coupled with signs that AI adoption may be slower than anticipated, which could adversely affect growth prospects. Furthermore, the company is susceptible to risks associated with public sector spending cuts, which constitute approximately 10% of its revenue, and challenges related to its ability to innovate and penetrate international markets effectively.