ServiceNow's Quarterly Earnings Preview: What You Need to Know
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With a market cap of $188.1 billion, Santa Clara, California-based ServiceNow, Inc. (NOW) provides cloud-based workflow automation solutions for digital transformation. Its Now Platform enables businesses to streamline operations and enhance productivity using AI, machine learning, and automation. The company is expected to announce its fiscal Q3 earnings results after the market closes on Wednesday, Oct. 23.
Ahead of this event, analysts expect NOW to report a profit of $1.66 per share, up 37.2% from $1.21 per share in the previous year's quarter. The company has surpassed Wall Street's bottom-line estimates in the past four quarters. In the most recent quarter, the company exceeded the consensus estimate by a margin of 29.6%.
For fiscal 2024, analysts expect NOW to report EPS of $6.78, up significantly 127.5% from $2.98 in fiscal 2023. Looking ahead to fiscal 2025, EPS is anticipated to grow nearly 27% year-over-year to $8.61.
NOW stock soared 67.3% over the past 52 weeks, outpacing both the S&P 500 Index's ($SPX) 34.9% rise and the Technology Select Sector SPDR Fund's (XLK) 36.6% gain over the same period.
ServiceNow's stock climbed 13.4% on Jul. 25 due to its strong Q2 earnings report, which exceeded Wall Street's expectations with adjusted EPS of $3.13 and sales of $2.6 billion. The company also saw 23% growth in subscription revenues and closed 88 deals worth over $1 million, a 26% year-over-year increase. Additionally, enthusiasm around its integration of generative AI to "reinvent every workflow" and strong forward guidance, including 22% subscription revenue growth for the full year, fueled investor optimism.
Analysts' consensus rating on ServiceNow stock is bullish, with a "Strong Buy" rating overall. Out of 33 analysts covering the stock, opinions include 28 "Strong Buys," two "Moderate Buys," two "Holds," and one "Strong Sell." The configuration has remained fairly steady over the past three months. As of writing, NOW is trading above the average analyst price target of $874.72.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.