1 Wall Street Analyst Thinks ServiceNow Is Going to $1,230. Is It a Buy Around $1,023?

ServiceNow (NYSE: NOW) is one of the biggest software companies on the stock market, and it's also been a top performer for much of its history.

The company's core Now platform is used for a wide range of IT management tasks, as it acts as a hub for managing, processing, and automating workflows. Among the applications that businesses use it for include inventory and supply chain operations, customer relationship management, and for cybersecurity.

That flexibility has helped make the stock a winner, and it seems to have just won over another bull on Wall Street.

Scotiabank calls ServiceNow a buy

Scotiabank's investment firm recently initiated coverage on ServiceNow, with an outperform rating and a price target of $1,230. That target implies a 20% boost for the stock over the next 12 months or so.

The analyst acknowledged that it had been a volatile year in the software sector, but thinks established leaders like ServiceNow can outperform the broader sector. As a longtime winner on the market, ServiceNow looks well-positioned to outperform its peers.

Is ServiceNow a buy?

The software sector has struggled over the last few years amid a post-pandemic pullback and the rise of artificial intelligence (AI), which has shifted attention to the semiconductor sector.

However, ServiceNow has continued to thrive despite those challenges. The stock is up 51% over the last three years, pushing into all-time highs this year.

The company has also pushed into profitability, with rapidly expanding margins and consistently strong revenue growth. In its third-quarter earnings report, revenue rose 22% year over year to $2.8 billion, and its generally accepted accounting principles (GAAP) operating income nearly doubled to $418 million.

As a core SaaS platform and one that's capitalizing on AI by applying it to workflows and agents, ServiceNow continues to have a bright future ahead of it. While the stock is expensive, it continues to look like a buy for long-term investors.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $381,173!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,232!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $469,895!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 18, 2024

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.