BofA/Merrill Lynch Starts ServiceNow (NOW) at Buy

BofA/Merrill Lynch initiates coverage on ServiceNow (NYSE: NOW) with a Buy rating and a price target of $75.00.

Analyst Brad Sills said, "We recognize that ServiceNow's premium valuation (10x C15E revenue) presents risk of pullback in the event of changing market sentiment stemming from global macro uncertainty. However, we believe that ServiceNow is likely to grow into this valuation, with 30% to 40% sustained billings growth, driven by share gains in both the core ITSM market ($11.5 billion) and adjacent custom applications market ($34.6 billion) for mid-sized/large enterprises. We believe that ServiceNow is emerging as a cloud platform provider, given advantages such as ease of customization and enterprise class uptime, redundancy and data partitioning."

For an analyst ratings summary and ratings history on ServiceNow click here. For more ratings news on ServiceNow click here.

Shares of ServiceNow closed at $62.03 yesterday.

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