ServiceNow shares face risk from DOJ probe into partner By Investing.com

ServiceNow (NYSE: NYSE:), a leading provider of digital workflow solutions, was highlighted by Keybanc for potential business disruption due to a Department of Justice (DOJ) investigation involving one of its partners, Carahsoft. The investigation, which has been underway since 2022, examines whether SAP and Carahsoft conspired to fix prices on SAP products sold to the U.S. government.

The allegations are tied to the False Claims Act, a statute that Carahsoft has previously encountered legal issues with.

In 2015, Carahsoft and VMWare settled a lawsuit for $75.5 million related to the Fair Claims Act. Additionally, reports from this morning indicate that the FBI has raided Carahsoft’s offices. Although ServiceNow was not named in the lawsuit, its significant business with the U.S. government, which contributes over $1 billion to its revenue, could be impacted by the ongoing investigation.

Keybanc pointed out that while a potential fine is a concern, the broader implications of the lawsuit could have ripple effects on ServiceNow’s operations. The firm’s relationship with Carahsoft, a major partner, and its strong presence in the U.S. government sector put it at risk of indirect consequences from the legal scrutiny facing Carahsoft.

The investigation’s findings and any subsequent actions could influence ServiceNow’s future dealings with the government market. Given the scale of ServiceNow’s government-related revenue, the outcome of this investigation is a matter of interest for investors and stakeholders in the company.

ServiceNow’s stock performance may be closely watched in the coming days as the market assesses the potential impact of the DOJ’s investigation on the company’s business with the U.S. government. As the situation develops, further details may emerge regarding the extent of the potential disruption to ServiceNow’s operations.

Okta (NASDAQ:) Inc., a leading identity management company, has seen several adjustments in its financial outlook. Following the release of Okta’s second-quarter fiscal year 2025 results, Deutsche Bank lowered its price target for Okta’s shares to $115 while maintaining a Buy rating. The company reported a 16% year-over-year revenue increase to $646 million, mainly driven by a 17% rise in subscription revenue. However, Okta’s third-quarter calculated remaining performance obligations (cRPO) guidance fell short of projections.

Several firms such as Piper Sandler and Canaccord Genuity adjusted their price targets for Okta to $100 and $90 respectively. BMO Capital Markets, on the other hand, raised its price target to $103, citing Okta’s robust growth in remaining performance obligations.

Truist Securities, Baird, and Scotiabank also adjusted their price targets to $95, $105, and $92 respectively, due to concerns about Okta’s growth, particularly in new business and the small to medium-sized business sector.

Despite the adjustments, Okta’s management remains confident in the company’s potential, as evidenced by the launch of new initiatives such as Identity Security Posture Management and Identity Threat Protection.

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