ServiceNow (NOW) PT Cut to $90 at Brean Capital

Brean Capital analyst Sarah Hindlian trimmed her price target on ServiceNow (NYSE: NOW) to $90.00 (from $97.00) following ho-hum Q1 results but maintained a Buy rating. The analyst said elongating sales cycles are coming into play.

Hindlian commented, "ServiceNow reported a quarter that was slightly above expectations, but not the “beat and raise” many were expecting. The quarter was adversely impacted by a sales force reorg. and concurrent drained pipeline at the start of the quarter, which caused increased Q1 seasonality. This is a common occurrence for enterprise software companies, but appears to have unfortunately caught many by surprise (ourselves included). However, we believe the after-market reaction reflects strong outperformance into the print, as well as overall anxiety in the market, as opposed to deteriorating fundamentals. We believe that the underlying business remains healthy and that there is no change to the competitive environment at present. We reiterate our Buy rating, though we are trimming our TP to $90 (from $97) on adjustments to our long-term revenue growth estimates."

The firm moved FY 2015 EPS from $0.22 to $0.26 and FY 2016 EPS from $0.39 to $0.45.

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 $82.84 yesterday.

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