Jim Cramer discussed ServiceNow, Inc. (NYSE: NOW) during a recent episode. A caller pointed out the stock is at a one-year low and asked if it is time to buy. Cramer responded by noting the stock is down about a hundred dollars.
"Okay, so ServiceNow, wow. Is it at a one-year low? It is down a hundred bucks. Holy cow," Cramer said. "Alright, so why is ServiceNow going down? Enterprise software, whether it be Adobe, which has really been hammered, whether it be Salesforce, which is not doing well, the chart that is, or ServiceNow, it’s pretty awful."
Cramer added, "I am not going to call bottom in ServiceNow. It is just too darn hard for me."
ServiceNow provides a cloud platform supporting digital workflows through AI, automation, and other tools. During the January 5 episode, the caller also highlighted a recent stock split. Cramer replied to this inquiry.
"Well, the problem is that it is a software company and the software companies are being eaten by the hardware, some would say," Cramer stated. "It still has a high price-to-earnings multiple. I was surprised the stock gave up so many points on Friday. I thought it would bounce back today, and it really didn't."
He continued, "I think that at 42 times earnings, it’s a PE multiple, it’s still a little too high for me. It is one of the better companies in an industry that is being, well, it’s having a tough time with AI, even though it is an AI leader itself. Odd, huh?"