CLSA initiated coverage on ServiceNow (NOW) with an "Underperform" rating. It set a $72.00 price target, citing valuation concerns. This target suggests a potential 31% downside from current trading levels.
Analyst Bhavtosh Vajpayee noted ServiceNow's steady growth amid AI's rise. He stated markets may have already priced the company as an AI winner.
CLSA's bearish valuation stance contrasts with other recent analyst actions. Oppenheimer, for example, recently increased its price target for ServiceNow. CLSA based its valuation on a 25x multiple of ServiceNow's fiscal year 2027 GAAP price-to-earnings ratio.
This initiation precedes ServiceNow's quarterly earnings report by two days.