ServiceNow Inc. (NYSE:NOW) stock fell almost 2% Wednesday as traders took profits after the stock’s recent rebound. The decline came during a mostly steady market session.
The Nasdaq slipped 0.11%, while the S&P 500 gained 0.02%.
Technical Analysis
ServiceNow remains above several key moving averages. The stock traded 1.7% above its 20-day simple moving average of $122.30. It was also 12.7% above its 50-day SMA of $110.32 and 4% above its 200-day SMA of $119.58.
However, the longer-term trend remains mixed. The 50-day SMA is still below the 200-day SMA. This suggests that the stock has not fully repaired its broader trend.
Momentum is also cooling. The moving average convergence divergence indicator is below its signal line and has a negative histogram. As a result, the recent rally may struggle to gain traction unless buyers return.
ServiceNow reached a swing low in June and a swing high in August. The stock also broke below support in August before starting its latest rebound.
Key resistance stands near $139. A move toward that level could test the strength of the recovery. Support sits near $117.50, where buyers previously stepped in.
Analyst Outlook
The stock trades at a price-to-earnings ratio of 79.4. That premium valuation could leave shares more exposed if growth or momentum weakens.
ServiceNow has a consensus Buy rating and an average price forecast of $140.39. Recent analyst actions include:
- Bank of America Securities maintained a Buy rating and raised its price target to $150 on Aug. 19.
- TD Cowen maintained a Buy rating and a $140 price target on Aug. 17.
- Wells Fargo maintained an Overweight rating and raised its price target to $175 on Aug. 12.
Benzinga Edge Rankings
The Benzinga Edge scorecard highlights ServiceNow’s strengths and weaknesses compared with the broader market.
- Momentum: 53.18: The stock remains above key moving averages, but its short-term momentum is cooling.
- Quality: 31.09: The company’s quality score remains moderate, which puts more focus on execution.
- Value: 9.63: ServiceNow scores poorly on traditional value measures. Its premium valuation could deepen pullbacks when momentum fades.
- Growth: 71.16: The strong growth score shows that investors still view ServiceNow as a long-term growth company.
Overall, ServiceNow has a growth-focused profile but faces a clear valuation risk. If momentum continues to weaken, the stock may need strong business execution or broader market support to hold above key technical levels.
Top ETF Exposure
ServiceNow is included in several technology-focused exchange-traded funds:
- iShares Expanded Tech-Software Sector ETF (BATS:IGV): 4.02% weighting
- Global X Cloud Computing ETF (NASDAQ:CLOU): 4.12% weighting
- GraniteShares 2x Long NOW Daily ETF (NASDAQ:NOWL): 66.65% weighting
Inflows or outflows from these ETFs can create additional buying or selling pressure in ServiceNow shares. NOWL can have an especially strong connection to the stock because it seeks leveraged daily exposure to ServiceNow.
Price Action
ServiceNow shares were down 1.79% at $124.73 at the time of publication Wednesday, according to Benzinga Pro.
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