KeyBanc Keeps Underweight Rating on ServiceNow Over Pricing Concerns

KeyBanc has maintained its Underweight rating on ServiceNow stock, setting a price target of $85.00. The firm cites apprehension regarding the company’s new pricing model, which became effective on July 1st. Analysts report that customers are proactively renewing large contracts early to circumvent the anticipated price hikes associated with these structural changes.

ServiceNow shares have experienced a sharp 45% decline over the past year. Despite the current valuation, which reflects a P/E ratio of 62.33, some analytical platforms suggest the company may be trading below its intrinsic value. The conflict between current market sentiment and potential long-term fundamentals remains a central theme for investors monitoring the company's fiscal direction.

Investors are watching for how these early contract renewals will impact future revenue recognition and customer sentiment. The company’s ability to successfully navigate the transition to its new pricing model will likely dictate near-term stock performance. If customers view the value proposition as strong enough to withstand these price increases, ServiceNow may regain investor confidence in upcoming quarters.