ServiceNow (NOW) Stock Gets a $130 Target — Here’s Why BofA Is Buying the Dip

TLDR

• BofA Securities initiated coverage on ServiceNow (NOW) with a Buy rating and a $130 price target
• The stock is currently trading around $95, down roughly 38% year-to-date and 54% over the past year
• BofA set the price target at 19x its CY2027 enterprise value-to-free cash flow estimate
• The firm believes ServiceNow is positioned to benefit from AI rather than be disrupted by it
• Cantor Fitzgerald and Truist Securities also hold positive ratings, with targets of $122 and $120 respectively

ServiceNow (NOW) stock is trading around $95.07 after Bank of America initiated coverage with a Buy rating and a $130 price target on Monday.

ServiceNow, Inc., NOW

The stock is down roughly 38% year-to-date and has dropped 54% over the past 12 months, falling sharply from its 52-week high of $211.48.

BofA’s $130 target is based on 19 times the firm’s calendar year 2027 enterprise value-to-free cash flow estimate.

The bank described ServiceNow as holding a “mission-critical” position in enterprise workflows — the system that governs, routes, approves, and audits activity across organizations.

That deep integration into business operations is what BofA sees as ServiceNow’s core strength. The firm argues that displacing the platform would be costly and complex for any enterprise that relies on it.

On the AI question, BofA took a clear stance: ServiceNow stands to gain from the rise of autonomous AI agents, not lose to them. The bank sees the company’s workflow infrastructure as well-suited to manage and orchestrate AI activity across IT, employee, and customer processes.

ServiceNow carries gross profit margins of 76.6%, according to InvestingPro data. Its revenue has grown at 21.2% annually over the past three years.

What Other Analysts Are Saying

BofA isn’t alone in its positive view. Cantor Fitzgerald holds an Overweight rating with a $122 price target, while Truist Securities has a Buy rating and a $120 target.

Both firms have recently reiterated their ratings, citing ServiceNow’s positioning in AI governance and orchestration as key reasons.

The company has been active on the product and partnership front. ServiceNow recently expanded its partnership with Amazon Web Services to roll out new AI governance tools, following AWS Marketplace transactions that surpassed $1 billion for its products.

It also launched Build Agent inside ServiceNow Studio, a tool that lets developers build apps using natural language prompts. The tool is powered by Anthropic models.

Recent Deals and Growth Signals

NowVertical Group, a ServiceNow partner, secured a three-year agreement with a fintech client across Argentina, Colombia, and Mexico, covering Google Cloud and AI solutions. The deal is valued at around $4 million.

ServiceNow’s market cap sits at approximately $98.3 billion. Its P/E ratio is currently 56.81, above the company’s ten-year median of 49.46.

GF Score data from GuruFocus gives the company a 72 out of 100, with a perfect 10/10 growth rank and a financial strength rating of 8/10.

Insider activity has been mixed. Over the past three months, one insider bought around 28,682 shares, while others sold approximately $2.2 million worth of stock.

The stock was up around 5% on Monday following the BofA initiation.

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