What happened
Shares of software outfit ServiceNow (NOW 0.72%) logged a 16% advance in June, according to numbers from S&P Global Market Intelligence. The perennial favorite won the favor of a couple of different kinds of company critics.
So what
Not that the stock wasn't already primed for a rebound from a couple of sell-offs suffered earlier in the year, but whatever snapback was in the cards for ServiceNow was boosted by a pair of encouraging assessments.
The first of these came from Goldman Sachs, which added the stock to its so-called conviction list of names the bank firmly believes in. Already rated a buy, Goldman's price target stands at $695 per share, versus the stock's current price near $558. Goldman Sachs analyst Kash Rangan suggests the company could triple its revenue in just a few years thanks to computing-environment changes essentially forced by the pandemic.
Image source: Getty Images.
Later in the month Information technology market research outfit Gartner named ServiceNow a Leader among CRM (customer relationship management) Customer Engagement Center service providers. The rating not only serves as recognition of the quality of ServiceNow's solutions, but can be leveraged as a marketing tool of sorts to companies seeking out customer relationship management solutions.
Both accolades beef up the case for owning shares of the software name.
Now what
Current shareholders can celebrate both developments, although neither is a reason to take on a new position. They're simply affirmations of what shareholders already know -- this is a company that's on a growth tear for the right reasons. That, however, is a reason to own a stake in ServiceNow.
Just don't be too quick to dive in if you're not already an investor.
Shares are now technically overextended thanks to June's run-up, and while a pullback isn't guaranteed to take shape, the rally's pause since last week is concerning. The buying has stalled near April's highs of around $560, hinting that at the very least the market's waiting for shares to stabilize before committing to another leg higher. The stock's also been no stranger of late to sizable corrections.
In other words, it's a worthy name to add to your watchlist, but it's not necessarily a name to make a point of plowing into based solely on last month's momentum.
