Why ServiceNow (NOW) is a Top Momentum Stock for the Long-Term

Zacks Investment Research highlights ServiceNow (NOW) as a compelling momentum stock, citing its Now Platform adoption by Fortune 500 and Global 2000 companies. While holding a Zacks Rank #3 (Hold), NOW exhibits a VGM Score of B and a Momentum Style Score of B, with shares up 4.4% in the last four weeks; furthermore, the consensus earnings estimate for fiscal 2025 has increased by $0.25 to $16.51 per share based on upward revisions from 12 analysts.

Analysis

ServiceNow (NOW) demonstrates significant market penetration with its Now Platform, utilized by over 85% of Fortune 500 companies and nearly 60% of Global 2000 enterprises, underscoring its critical role in enterprise workflow digitization. Despite a Zacks Rank #3 (Hold), the company exhibits positive momentum characteristics, evidenced by a Momentum Style Score of B and an overall VGM Score of B. This is corroborated by practical market performance, with NOW's shares appreciating 4.4% over the past four weeks. Analyst sentiment for fiscal 2025 is increasingly optimistic; twelve analysts have revised their earnings estimates upward in the last 60 days, resulting in the Zacks Consensus Estimate for earnings per share rising by $0.25 to $16.51. Furthermore, ServiceNow has a consistent history of exceeding market expectations, as indicated by an average earnings surprise of 6.6%. The overall optimistic tone and strongly positive sentiment signals (0.75 general, 0.8 for NOW) suggest underlying strength despite the neutral formal rating.

Key Decisions for Investors

• Investors, particularly those with a momentum-driven strategy, should note ServiceNow's B-rated Momentum Style Score and recent 4.4% share price appreciation, alongside positive fiscal 2025 earnings estimate revisions to $16.51 per share, despite its current Zacks #3 (Hold) rating.
• Given the upward revisions in fiscal 2025 earnings estimates and a consistent 6.6% average earnings surprise, investors should closely monitor upcoming earnings reports and further analyst estimate changes for confirmation of sustained growth trajectory, which could potentially lead to a rating upgrade.
• While the 'Hold' rating warrants a degree of caution, the strong platform adoption by major enterprises, positive momentum indicators, and favorable analyst sentiment suggest ServiceNow should be on investors' short list, with a focus on continued positive estimate revisions as a key catalyst.