Why ServiceNow Stock Is Rising Today
Key Points
An analyst upgraded his rating on ServiceNow stock this morning.
Shares of ServiceNow are trading at a discount to their historical valuation.
- 10 stocks we like better than ServiceNow ›
It's an auspicious start to July for ServiceNow (NYSE: NOW) stock. While the S&P 500 and Dow Jones Industrial Average are struggling to stay in positive territory, the cloud stock is performing well after an analyst took a more bullish stance.
As of 11:43 a.m ET, shares of ServiceNow are up 6.2%.
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Strong growth potential is just one reason this analyst is bullish
Upgrading his rating to buy from neutral, John DiFucci, an analyst at Guggenheim, set a $125 price target on ServiceNow stock. DiFucci characterizes ServiceNow as a "comfortably profitable" company and believes it's well-positioned to continue growing organically at a double-digit pace, according to Thefly.com.
Furthermore, DiFucci sees ServiceNow stock as an "attractive opportunity" based on its current valuation.
Currently, ServiceNow stock is trading at 18.5 times operating cash flow, a discount to its five-year average cash flow multiple of 39.
Based on yesterday's closing price of $33.49, DiFucci's $125 price target implies upside of 25.9%.
Is ServiceNow a good cloud stock to buy now?
As the cloud stock has plummeted more than 31% through the first half of 2026, it's clear that ServiceNow stock has fallen out of favor with investors. DiFucci is right, though, to recognize the company's profitability and its potential to sustain continued growth as green flags.
Today seems like a good time to consider buying shares, yet investors seeking cloud exposure may be hesitant to buy ServiceNow stock given its recent performance. For these investors, investing in a cloud computing ETF that includes ServiceNow among its holdings may be a more attractive option.
Should you buy stock in ServiceNow right now?
Before you buy stock in ServiceNow, consider this:
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool has a disclosure policy.
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