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What's in Store for ServiceNow (NOW) This Earnings Season?
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ServiceNow, Inc. (NOW - Free Report) is scheduled to release first-quarter 2021 results on Apr 28.
The Zacks Consensus Estimate for revenues is currently pegged at $1.33 billion, which indicates growth of 27.4% from the year-ago quarter’s reported figure. The quarterly performance is likely to have been driven by the company’s robust product portfolio and its Now Platform in the to-be-reported quarter.
The Zacks Consensus Estimate for first-quarter earnings has been steady at $1.34 in the past 30 days, which suggests an increase of 27.62% from the prior-year quarter’s levels.
Notably, the company has a trailing four-quarter earnings surprise of 14.46%, on average.
Factors Likely to Impact Q1 Performance
ServiceNow expects first-quarter non-GAAP adjusted subscription revenues are anticipated between $1.275 billion and $1.28 billion (adjusted for constant currency), which indicates growth of 28-29% year over year. Non-GAAP adjusted subscription billings are projected between $1.31 billion and $1.315 billion, which suggests a rise of 24-25% year over year.
Notably, the Zacks Consensus Estimate for subscription billings is currently pegged at $1.258 billion, which indicates an improvement of 18.1% over the year-ago quarter’s tally.
ServiceNow’s first-quarter performance is expected to have benefitted from continued healthy uptake of its workflows from enterprises undergoing digital transformation, globally, triggered by the pandemic.
The company’s HR solutions have also been growing in popularity due to the heightened need for effective employee management amid evolving workspace trends. Higher adoption of HR offerings along with strong demand for ServiceNow’s customer service management (CSM) solutions is likely to have contributed to the top line in the to-be-reported quarter.
ServiceNow's return to work solutions especially Safe Workplace Suite deserves a special mention. The robust adoption of Safe Workplace suite is anticipated to have contributed to performance in the first quarter. The company’s Safe Workplace apps boasts of more than 900 customers.
Moreover, ServiceNow’s new product launches also are anticipated to have added to the top line in the first quarter. In January 2021, the company launched vaccine administration management applications solutions to aid enterprises in managing vaccine distribution, administration and monitoring. The solutions were leveraged by State of North Carolina, Department of Health and Human Services.
Further, in March 2021, ServiceNow rolled out updates for its Vaccine Administration Management solution that facilitates vaccine inventory management for providers and assists people to easily plan their vaccination appointment. The company also disclosed that U.S. Department of Homeland Security (DHS) was leveraging the company’s vaccine management solutions for employees.
The company’s other new solutions (launched in 2020) like Workplace Service Delivery solutions and Connected Operations solution are expected to have positively contributed to the top-line performance in the to-be reported quarter
Growing clout of the company's products instill optimism in the stock. Notably, shares of the company have return 81% in the past year compared with the industry’s rally of 89.4%.
However, higher expenditure on product innovation, might have exerted pressure on margins during the quarter under review.
Weakness across industries like airlines, retail, hospitality, energy and transportation, which are hit-hard by COVID-19 crisis, is an added concern for this Zacks Rank #3 (Hold) company, at least in the near term.
Moreover, with re-imposition of lockdowns in several parts of the world due to another infection wave might have hindered business prospects for the company.
In March 2021, ServiceNow announced the purchase of Intellibot, an India-based robotic process automation (RPA) company for an undisclosed amount. The acquisition, subject to regulatory and customary approvals, is expected to be concluded in the second quarter of 2021.
Stocks to Consider
Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:
Texas Instruments (TXN - Free Report) has an Earnings ESP of +4.25% and holds a Zacks Rank of 2.
Avnet (AVT - Free Report) has an Earnings ESP of +0.89% and currently carries a Zacks Rank of 2.
Sirius XM Holdings (SIRI - Free Report) has an Earnings ESP of +12.9% and a Zacks Rank of 2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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What's in Store for ServiceNow (NOW) This Earnings Season?
ServiceNow, Inc. (NOW - Free Report) is scheduled to release first-quarter 2021 results on Apr 28.
The Zacks Consensus Estimate for revenues is currently pegged at $1.33 billion, which indicates growth of 27.4% from the year-ago quarter’s reported figure. The quarterly performance is likely to have been driven by the company’s robust product portfolio and its Now Platform in the to-be-reported quarter.
The Zacks Consensus Estimate for first-quarter earnings has been steady at $1.34 in the past 30 days, which suggests an increase of 27.62% from the prior-year quarter’s levels.
ServiceNow, Inc. Price and EPS Surprise
ServiceNow, Inc. price-eps-surprise | ServiceNow, Inc. Quote
Notably, the company has a trailing four-quarter earnings surprise of 14.46%, on average.
Factors Likely to Impact Q1 Performance
ServiceNow expects first-quarter non-GAAP adjusted subscription revenues are anticipated between $1.275 billion and $1.28 billion (adjusted for constant currency), which indicates growth of 28-29% year over year. Non-GAAP adjusted subscription billings are projected between $1.31 billion and $1.315 billion, which suggests a rise of 24-25% year over year.
Notably, the Zacks Consensus Estimate for subscription billings is currently pegged at $1.258 billion, which indicates an improvement of 18.1% over the year-ago quarter’s tally.
ServiceNow’s first-quarter performance is expected to have benefitted from continued healthy uptake of its workflows from enterprises undergoing digital transformation, globally, triggered by the pandemic.
The company’s HR solutions have also been growing in popularity due to the heightened need for effective employee management amid evolving workspace trends. Higher adoption of HR offerings along with strong demand for ServiceNow’s customer service management (CSM) solutions is likely to have contributed to the top line in the to-be-reported quarter.
ServiceNow's return to work solutions especially Safe Workplace Suite deserves a special mention. The robust adoption of Safe Workplace suite is anticipated to have contributed to performance in the first quarter. The company’s Safe Workplace apps boasts of more than 900 customers.
Moreover, ServiceNow’s new product launches also are anticipated to have added to the top line in the first quarter. In January 2021, the company launched vaccine administration management applications solutions to aid enterprises in managing vaccine distribution, administration and monitoring. The solutions were leveraged by State of North Carolina, Department of Health and Human Services.
Further, in March 2021, ServiceNow rolled out updates for its Vaccine Administration Management solution that facilitates vaccine inventory management for providers and assists people to easily plan their vaccination appointment. The company also disclosed that U.S. Department of Homeland Security (DHS) was leveraging the company’s vaccine management solutions for employees.
The company’s other new solutions (launched in 2020) like Workplace Service Delivery solutions and Connected Operations solution are expected to have positively contributed to the top-line performance in the to-be reported quarter
Growing clout of the company's products instill optimism in the stock. Notably, shares of the company have return 81% in the past year compared with the industry’s rally of 89.4%.
However, higher expenditure on product innovation, might have exerted pressure on margins during the quarter under review.
Weakness across industries like airlines, retail, hospitality, energy and transportation, which are hit-hard by COVID-19 crisis, is an added concern for this Zacks Rank #3 (Hold) company, at least in the near term.
Moreover, with re-imposition of lockdowns in several parts of the world due to another infection wave might have hindered business prospects for the company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notable Development for Q1
In March 2021, ServiceNow announced the purchase of Intellibot, an India-based robotic process automation (RPA) company for an undisclosed amount. The acquisition, subject to regulatory and customary approvals, is expected to be concluded in the second quarter of 2021.
Stocks to Consider
Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:
Texas Instruments (TXN - Free Report) has an Earnings ESP of +4.25% and holds a Zacks Rank of 2.
Avnet (AVT - Free Report) has an Earnings ESP of +0.89% and currently carries a Zacks Rank of 2.
Sirius XM Holdings (SIRI - Free Report) has an Earnings ESP of +12.9% and a Zacks Rank of 2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>