Analysts Say You Should Buy These 5 Stocks on the Dip

4. ServiceNow, Inc. (NYSE:NOW)

Number of Hedge Fund Holders: 90     

Decrease in Share Price Over Past Month: 6.42%   

ServiceNow, Inc. (NYSE:NOW) provides enterprise cloud computing solutions. The company posted earnings for the first quarter of 2022 in late April, reporting earnings per share of $1.73, beating market expectations by $1.50. The revenue over the period was $1.72 billion, up more than 26% compared to the revenue over the same period last year and beating market expectations by $20 million. The subscription revenues for the firm registered 26% year-on-year growth during the period. 

On May 25, Stifel analyst Brad Reback maintained a Buy rating on ServiceNow, Inc. (NYSE:NOW) stock and lowered the price target to $550 from $650, noting that the “expanding platform, growing pipeline, and large deal momentum” would drive over 20% revenue growth and significant margin expansion for the firm in the coming months. 

At the end of the first quarter of 2022, 90 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in ServiceNow, Inc. (NYSE:NOW), the same as in the preceding quarter worth $8.4 billion.

In its Q3 2021 investor letter, Palm Capital, an asset management firm, highlighted a few stocks and ServiceNow, Inc. (NYSE:NOW) was one of them. Here is what the fund said:

“ServiceNow, Inc. (NYSE:NOW) shares were our final top contributor for 3Q on a strong beat and raise quarter. The company reported 31% subscription revenue growth, 30% subscription billings growth, and a 19% non-GAAP FCF margin for the quarter, while raising full year subscription revenue and billings guidance to 29% and 31%, respectively, as well as raising non-GAAP FCF margin by 100 basis points to 31%.

ServiceNow, Inc. (NYSE:NOW) is a best-of-breed provider of both IT Service Management (ITSM) and IT Operations Management (ITOM) solutions to enterprise customers. The company’s products serve mainly its clients’ internal employee base with a current focus on automating the process of IT deployment, configuration and service and management of IT assets across an organization. Both its ITSM and ITOM solutions are delivered as a software-as-a-service (SaaS), and are each leading solutions in growing markets, driven by the secular trend of enterprises transitioning all aspects of their business and operations to the cloud. As the company maintains and adds customers, upsells them, and expands into adjacent markets, we believe ServiceNow, Inc. (NYSE:NOW) should sustain a strong long-term revenue and FCF growth trajectory.”