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UPDATE: Goldman Sachs Initiates Coverage On ServiceNow

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Goldman Sachs initiated coverage on ServiceNow Inc (NYSE: NOW) Tuesday with a Buy rating and $80 price target.

Analysts led by Greg Dunham commented that “revenue growth is being driven by large enterprise adoption (i.e., 473 Global 2000 customers compares with 245 two years ago) and expanding revenue per customer ($275k vs. $227k last year).”

“We see ServiceNow’s beachhead within IT allowing the company to capture a bigger piece of an IT budget with time. The platform’s strategic positioning can be seen by large commitments customers place on ServiceNow (i.e., 107 customers pay ServiceNow more than $1mn annually and its largest customer is approaching $10mn per year),” according to the analyst note.

Dunham concluded, “Best-in-class sales productivity is supported by low churn and customer expansion tailwinds as IT professionals leverage ServiceNow beyond traditional IT Service operations (i.e., Incident mgmt., asset mgmt., change and configuration mgmt., etc.) to custom app development and internal service applications.”

The $80 price target was based on a “10-year DCF that assumes 30 percent FCF margins on ~$6bn in 2023 revenue, and a 13 percent WACC.”

ServiceNow recently traded at $64.52, up 1.7 percent

Latest Ratings for NOW

DateFirmActionFromTo
Nov 2019Initiates Coverage OnOverweight
Nov 2019UpgradesHoldBuy
Oct 2019MaintainsBuy

View More Analyst Ratings for NOW
View the Latest Analyst Ratings

Posted-In: Goldman Sachs Greg DunhamAnalyst Color Price Target Initiation Analyst Ratings

 

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Latest Ratings

StockFirmActionPT
TOLGoldman SachsInitiates Coverage On42.0
KBHGoldman SachsInitiates Coverage On36.0
YEXTSunTrust Robinson HumphreyMaintains28.0
LHCGSunTrust Robinson HumphreyMaintains160.0
DLRSunTrust Robinson HumphreyMaintains140.0
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