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ServiceNow (NOW) to Report Q3 Earnings: Is a Beat in Store?
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ServiceNow, Inc. (NOW - Free Report) is set to report third-quarter 2018 results on Oct 24.
Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters and came in line in the remaining one, recording an average positive surprise of 21%.
In the second quarter, earnings of 49 cents per share outpaced the Zacks Consensus Estimate by 6 cents. Further, the figure surged a whopping 122.7% from the year-ago quarter.
Moreover, revenues advanced 40.8% year over year to $631.1 million, beating the Zacks Consensus Estimate of $620 million.
We believe robust adoption witnessed by company’s expanding range of application based products by big private and public companies will drive top-line growth in the to-be-reported quarter.
For third-quarter 2018, management forecasts non-GAAP subscription revenues adjusted for constant currency between $611 million and $616 million, representing year-over-year growth of 36-37%.
Non-GAAP subscription billings adjusted for constant currency and constant billings durations are expected to improve 30-31% year over year to $649-$654 million.
The Zacks Consensus Estimate for revenues is pegged at $659.4 million, translating to year-over-year growth of 32.4%.
Moreover, the Zacks Consensus Estimate for earnings is pegged at 60 cents per share, implying a surge of 57.9% from the year-ago quarter.
Let’s see how things are shaping up prior to this announcement.
Favorable ESP
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ServiceNow has a Zacks Rank #3 and an Earnings ESP of +1.19%, which raises confidence about a possible earnings surprise.
Factors Driving Q3 Results
ServiceNow’s platform and tools are gaining rapid tractionin the Global 2000 ("G2K") companies. Per the last reported quarter, the company added 21 new G2K companies. It closed 33 contracts in the second quarter with an annualized contract value (“ACV”) of more than a million.
The company has 575 customers, contributing more than $1 million to the business, this figure increased 47% on a year-over-year basis.
Further, ServiceNow’s 58 customers generate more than $5 million a year, reflecting growth of 100% on a year-over-year basis.
Information Technology Service Management (“ITSM”) was part of 18 out of the top 20 deals struck in the last reported quarter. Moreover, the company’s focus on enhancing its IT Operations Management (“ITOM”) offering bodes well. Notably, ITOM was part of 16 of the top 20 deals.
Moving over to non-IT segment, ServiceNow continues to invest in platform and emerging products. The company is also expected to benefit from robust adoption of its Customer Service Management (“CSM”) and Security Operations products. Notably, out of the top 20 new dealsin the last reported quarter, both CSMand Security were part of seven out of the top 20 deals, individually.
ServiceNow is also exploring new end-markets beyond G2K. New deal wins in particular from federal, state and local governments is a positive. The company anticipates the third quarter to be a notable renewal period considering adoption of ServiceNow platform from federal governments.
The company’s growing influence with its ServiceNow Governance, Risk, and Compliance (“GRC”) offering is also a positive. Further, the company’s global presence and strong partnerships are other tailwinds.
We believe that company’s efforts in automated AI related developments and aiding clientele with digital transformation are expected to positively impact its results in to-be-reported quarter. These factors are expected to garner new deals, consequently bolstering customer base.
Other Stocks that Warrant a Look
Here are some other companies, which as per our model, also have the right combination of elements to post an earnings beat this quarter:
Bristol-Myers Squibb Company (BMY - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. The company is slated to report third quarter earnings on Oct 25.
Mellanox Technologies, Ltd. has an Earnings ESP of +1.04% and a Zacks Rank #2. The company is slated to report third quarter earnings on Oct 24.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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ServiceNow (NOW) to Report Q3 Earnings: Is a Beat in Store?
ServiceNow, Inc. (NOW - Free Report) is set to report third-quarter 2018 results on Oct 24.
Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters and came in line in the remaining one, recording an average positive surprise of 21%.
In the second quarter, earnings of 49 cents per share outpaced the Zacks Consensus Estimate by 6 cents. Further, the figure surged a whopping 122.7% from the year-ago quarter.
Moreover, revenues advanced 40.8% year over year to $631.1 million, beating the Zacks Consensus Estimate of $620 million.
We believe robust adoption witnessed by company’s expanding range of application based products by big private and public companies will drive top-line growth in the to-be-reported quarter.
For third-quarter 2018, management forecasts non-GAAP subscription revenues adjusted for constant currency between $611 million and $616 million, representing year-over-year growth of 36-37%.
Non-GAAP subscription billings adjusted for constant currency and constant billings durations are expected to improve 30-31% year over year to $649-$654 million.
The Zacks Consensus Estimate for revenues is pegged at $659.4 million, translating to year-over-year growth of 32.4%.
Moreover, the Zacks Consensus Estimate for earnings is pegged at 60 cents per share, implying a surge of 57.9% from the year-ago quarter.
Let’s see how things are shaping up prior to this announcement.
Favorable ESP
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ServiceNow, Inc. Price and EPS Surprise
ServiceNow, Inc. Price and EPS Surprise | ServiceNow, Inc. Quote
ServiceNow has a Zacks Rank #3 and an Earnings ESP of +1.19%, which raises confidence about a possible earnings surprise.
Factors Driving Q3 Results
ServiceNow’s platform and tools are gaining rapid tractionin the Global 2000 ("G2K") companies. Per the last reported quarter, the company added 21 new G2K companies. It closed 33 contracts in the second quarter with an annualized contract value (“ACV”) of more than a million.
The company has 575 customers, contributing more than $1 million to the business, this figure increased 47% on a year-over-year basis.
Further, ServiceNow’s 58 customers generate more than $5 million a year, reflecting growth of 100% on a year-over-year basis.
Information Technology Service Management (“ITSM”) was part of 18 out of the top 20 deals struck in the last reported quarter. Moreover, the company’s focus on enhancing its IT Operations Management (“ITOM”) offering bodes well. Notably, ITOM was part of 16 of the top 20 deals.
Moving over to non-IT segment, ServiceNow continues to invest in platform and emerging products. The company is also expected to benefit from robust adoption of its Customer Service Management (“CSM”) and Security Operations products. Notably, out of the top 20 new dealsin the last reported quarter, both CSMand Security were part of seven out of the top 20 deals, individually.
ServiceNow is also exploring new end-markets beyond G2K. New deal wins in particular from federal, state and local governments is a positive. The company anticipates the third quarter to be a notable renewal period considering adoption of ServiceNow platform from federal governments.
The company’s growing influence with its ServiceNow Governance, Risk, and Compliance (“GRC”) offering is also a positive. Further, the company’s global presence and strong partnerships are other tailwinds.
We believe that company’s efforts in automated AI related developments and aiding clientele with digital transformation are expected to positively impact its results in to-be-reported quarter. These factors are expected to garner new deals, consequently bolstering customer base.
Other Stocks that Warrant a Look
Here are some other companies, which as per our model, also have the right combination of elements to post an earnings beat this quarter:
Callaway Golf Company has an Earnings ESP of +71.42% and a Zacks Rank #1. The company is slated to report third quarter earnings on Oct 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bristol-Myers Squibb Company (BMY - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. The company is slated to report third quarter earnings on Oct 25.
Mellanox Technologies, Ltd. has an Earnings ESP of +1.04% and a Zacks Rank #2. The company is slated to report third quarter earnings on Oct 24.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>