ServiceNow Said To Be Closing In On $1B Security Startup Deal — Retail Traders Eye A Lift From 5-For-1 Stock Split

• The company has a valuation of $167.09 billion, based on its stock’s Wednesday closing price of $802.72. 
• At the end of the September quarter, the company had $2.725 billion in cash and cash equivalents.
• According to Koyfin, the average price target indicates the stock is trading at a 43% discount.

ServiceNow, Inc. (NOW) is reportedly eyeing a big-ticket acquisition in the security space as the end-to-end intelligent workflow automation platform provider beefs up its artificial intelligence (AI) prowess.

Year-to-date, ServiceNow stock has lost about 24%.

The M&A Rumor

An Information report stated that ServiceNow is in advanced talks to buy a security startup for at least $1 billion. This is part of the Santa Clara, California-based company’s efforts to bolster its AI agent-related products.

The company has a valuation of $167.09 billion, based on its stock’s Wednesday closing price of $802.72. At the end of the September quarter, the company had $2.725 billion in cash and cash equivalents.

ServiceNow has announced at least three strategic partnerships since the start of November. It struck a pact with the business and technology services company NTT Data to help its customers deploy AI-powered automation. It also announced an integration of its platform with Figma’s design and product development platform, as well as new integrations with Microsoft’s services.

After reporting a beat-and-raise quarter in late October, the company announced that its board had approved a five-for-one stock split, which will likely be implemented early next month.

ServiceNow: A ‘Great Company’

Earlier this week, Macquarie analyst Steve Koenig initiated coverage of ServiceNow with a ‘Neutral’ rating and a $860 price target. Koenig said, “We view NOW as a great company but only a fair stock at current levels, trading at a premium to our 40-company software index.” “We think NOW is among the best-positioned SaaS companies to drive AI adoption, but dispelling negative SaaS sentiment on AI fears could take time.”

On Stocktwits, retail sentiment toward the stock remained ‘bearish’ as of late Wednesday, and the message volume on the stream was at ‘low’ levels.

Commenting on the stream, a watcher said on Wednesday that they added a new position in NOW.

Another user braced for a rally, either before or after the split. “This has got to run up either before or after the split, feels like it’s being held down. Either way, I’ve averaged up a good amount recently.”

According to Koyfin, the average price target indicates the stock is trading at a 43% discount.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Zscaler Analyst Predicts 15% Upside For Stock After Post-Earnings Plunge — Retail Doubles Down

Share

·

Add us on