Solid Growth Amidst Market Competition
California-based ServiceNow, Inc. (NOW) offers a comprehensive intelligent workflow automation platform tailored for digital enterprises. With a valuation of $208.3 billion, the company’s solutions cater to a variety of business areas, including IT, HR, facilities, field service, marketing, customer service, security, legal, and finance.
Over the past year, shares of this software giant have outperformed the broader market significantly. In the last 52 weeks, NOW has risen by 53.6%, while the S&P 500 Index ($SPX) has climbed 30.6%. Year-to-date, NOW’s shares are up 42.3%, in contrast to the SPX’s 23.6% gain.
In addition, NOW’s performance has been more impressive than that of the Technology Select Sector SPDR Fund (XLK), which showed a 25.5% increase over the same 52-week period and a 19.2% rise on a year-to-date basis.
Following a strong Q3 earnings announcement on October 23, shares of NOW jumped 5.4%. The company reported adjusted earnings of $3.72 per share, exceeding Wall Street’s expectation of $3.46 and marking a 27.4% increase from the same quarter last year. Revenue rose 22% year-over-year to $2.8 billion, surpassing estimates of $2.7 billion.
Additionally, subscription revenue grew by an impressive 23%, hitting $2.7 billion. The outstanding performance is largely attributed to the ongoing advancements in AI technology and strong demand for the Now Platform. The company also raised its full-year 2024 revenue guidance, reinforcing investor trust.
For the current fiscal year, which ends in December, analysts predict a remarkable 137.3% increase in EPS, projecting it to reach $7.07. Historically, the company has consistently outperformed earnings forecasts, beating consensus estimates for the past four quarters.
Among the 33 analysts covering ServiceNow, the consensus rating is a “Strong Buy,” consisting of 28 “Strong Buy,” two “Moderate Buy,” two “Hold,” and one “Strong Sell” ratings.
On November 12, Wells Fargo increased its price target for the company to $1150, retaining an “Overweight” rating. This figure suggests a potential upside of 14.4% from current prices.
Currently, ServiceNow is trading above its mean price target of $998.48, while the highest price target on the street stands at $1170, indicating a possible increase of 16.4% from current levels.
On the date of publication, Neharika Jain did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
