Bearish Stance on ServiceNow Amid High Options Activity

Bearish sentiment looms over ServiceNow. Investors are showing strong interest in puts over calls, indicating potential price declines. Analysts remain optimistic, yet the market's current sentiment highlights some caution for investors.

Date: 24-02-2025

AI Rating: 5

Market Sentiment and Trading Signals
ServiceNow (NYSE: NOW) has recently experienced a notable shift in trading activity, revealing that large investors have adopted a bearish perspective. The data indicates that 55% of the options activity is bearish, while only 27% is bullish, signifying a prevailing cautious outlook among significant market players.

Among the options activity, a comparison of puts and calls showcases substantial put purchases, amounting to approximately $1.8 million compared to just over $1 million in calls. This imbalance further illustrates the negative sentiment padding the stock's outlook.

Additionally, the trading metrics reveal that major market participants expect the stock to fluctuate between a price band of $630.0 to $1200.0. This broad range emphasizes uncertainty about future price movements for ServiceNow.

Current Stock Performance
The current stock price for ServiceNow stands at $933.84, which has dropped by 0.49%. RSI indicators suggest potential overselling, meaning some investors might see this as a purchasing opportunity should investor sentiment shift effectively.

Analyst Opinions
Despite these bearish trends, many analysts retain a positive outlook on ServiceNow, with an average price target reaching up to approximately $1271.4. Recommendations from various analysts such as those from Jefferies, Citigroup, and Needham maintain their Buy ratings, indicating confidence in the company's future performance despite short-term bearish signals.

In conclusion, while market sentiment towards ServiceNow appears to lean bearish amid heavy put trading, the consensus from analysts remains broadly positive, indicating that long-term investors may find substantial value if the stock is able to rebound from current pricing levels.

Stocks: NOW