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ServiceNow (NOW) Expands Portfolio With UltimateSuite Buyout
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ServiceNow (NOW - Free Report) is expanding its portfolio with the recently announced acquisition of UltimateSuite. The deal, expected to be completed in the first quarter of 2024, will strengthen NOW’s process mining solutions, thereby improving its automation and AI capabilities.
Process mining presents a strong growth opportunity for the likes of ServiceNow, with Gartner expecting process mining software revenues to witness a CAGR of 33% between 2020 and 2025 and ultimately hitting $2.3 billion by 2025.
Process mining is a core capability of ServiceNow’s NOW platform. It helps in improving clients’ workflow processes by identifying and automating operational issues and headwinds. Ultimate’s task mining technology helps identify and streamline repetitive work and bolsters automation opportunities.
ServiceNow Benefits From Expanding Portfolio
ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1789 total customers, with more than $1 million in Annual Contract Value (ACV) at the end of the third quarter.
Its expanding generative AI portfolio is driving prospects. ServiceNow recently announced a major expansion to the Now Assist generative AI portfolio with the launch of Now Assist in Virtual Agent, Flow generation and Now Assist for Field Service Management.
These three new solutions help customers smoothen up their workflow and increase productivity. These help users by saving time on searching, summarizing and creating basic information while enabling conversational self-service, incident deflection and workflow automation simultaneously.
Now Assist has rapidly been gaining traction with adoption by the likes of NVIDIA (NVDA - Free Report) , Deloitte and Teleperformance. The company is also gaining rapid traction among federal agencies.
In third-quarter 2023, ServiceNow inked 19 federal deals worth more than $1 million, including three deals above $10 million. ACV for the federal end-market jumped 75% year over year.
NVIDIA, which is also ServiceNow’s technology partner, will use its Now Assist features like case summarization and question-answering to bring efficiencies to its operations.
The launch of Vancouver has been a game changer for ServiceNow’s generative AI portfolio. Vancouver embeds generative AI across all workflows on the Now Platform. It has also helped expand ServiceNow’s clientele. Currently, it has more than 300 customers in the pipeline from every industry, buying center and stage of testing.
Outlook Positive
For fourth-quarter 2023, ServiceNow expects subscription revenues between $2.320 billion and $2.325 billion, suggesting a year-over-year improvement of 24.5-25% on a GAAP basis. At cc, subscription revenues are expected to grow 23-23.5%.
For 2023, the company expects subscription revenues to be $8.635-$8.640 billion (up $48 million at the mid-point), which suggests a rise of 25.5% from that reported in 2022 on a GAAP basis. At cc, subscription revenues are expected to grow 25% from the 2022 actual.
The Zacks Consensus Estimate for 2023 revenues is pegged at $8.93 billion, indicating 23.27% year-over-year growth. The consensus mark for earnings is pegged at $10.44 per share, unchanged over the past 30 days.
Zacks Rank & Other Stocks to Consider
ServiceNow currently has a Zacks Rank #2 (Buy).
ServiceNow shares have returned 83.1% in the past year, outperforming the Zacks Computer & Technology sector’s growth of 49.7%.
Image: Bigstock
ServiceNow (NOW) Expands Portfolio With UltimateSuite Buyout
ServiceNow (NOW - Free Report) is expanding its portfolio with the recently announced acquisition of UltimateSuite. The deal, expected to be completed in the first quarter of 2024, will strengthen NOW’s process mining solutions, thereby improving its automation and AI capabilities.
Process mining presents a strong growth opportunity for the likes of ServiceNow, with Gartner expecting process mining software revenues to witness a CAGR of 33% between 2020 and 2025 and ultimately hitting $2.3 billion by 2025.
Process mining is a core capability of ServiceNow’s NOW platform. It helps in improving clients’ workflow processes by identifying and automating operational issues and headwinds. Ultimate’s task mining technology helps identify and streamline repetitive work and bolsters automation opportunities.
ServiceNow Benefits From Expanding Portfolio
ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1789 total customers, with more than $1 million in Annual Contract Value (ACV) at the end of the third quarter.
Its expanding generative AI portfolio is driving prospects. ServiceNow recently announced a major expansion to the Now Assist generative AI portfolio with the launch of Now Assist in Virtual Agent, Flow generation and Now Assist for Field Service Management.
ServiceNow, Inc. Price and Consensus
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
These three new solutions help customers smoothen up their workflow and increase productivity. These help users by saving time on searching, summarizing and creating basic information while enabling conversational self-service, incident deflection and workflow automation simultaneously.
Now Assist has rapidly been gaining traction with adoption by the likes of NVIDIA (NVDA - Free Report) , Deloitte and Teleperformance. The company is also gaining rapid traction among federal agencies.
In third-quarter 2023, ServiceNow inked 19 federal deals worth more than $1 million, including three deals above $10 million. ACV for the federal end-market jumped 75% year over year.
NVIDIA, which is also ServiceNow’s technology partner, will use its Now Assist features like case summarization and question-answering to bring efficiencies to its operations.
The launch of Vancouver has been a game changer for ServiceNow’s generative AI portfolio. Vancouver embeds generative AI across all workflows on the Now Platform. It has also helped expand ServiceNow’s clientele. Currently, it has more than 300 customers in the pipeline from every industry, buying center and stage of testing.
Outlook Positive
For fourth-quarter 2023, ServiceNow expects subscription revenues between $2.320 billion and $2.325 billion, suggesting a year-over-year improvement of 24.5-25% on a GAAP basis. At cc, subscription revenues are expected to grow 23-23.5%.
For 2023, the company expects subscription revenues to be $8.635-$8.640 billion (up $48 million at the mid-point), which suggests a rise of 25.5% from that reported in 2022 on a GAAP basis. At cc, subscription revenues are expected to grow 25% from the 2022 actual.
The Zacks Consensus Estimate for 2023 revenues is pegged at $8.93 billion, indicating 23.27% year-over-year growth. The consensus mark for earnings is pegged at $10.44 per share, unchanged over the past 30 days.
Zacks Rank & Other Stocks to Consider
ServiceNow currently has a Zacks Rank #2 (Buy).
ServiceNow shares have returned 83.1% in the past year, outperforming the Zacks Computer & Technology sector’s growth of 49.7%.
Ceridian HCM and 8x8 (EGHT - Free Report) are some other top-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ceridian HCM shares have gained 7.5% in the past year while 8x8 shares have lost 20%.