Stock Split Mechanics - A stock split reduces the share price by a factor while increasing the outstanding share count proportionally, leaving the market capitalization unchanged [1] - The primary purpose of a stock split is to make shares more accessible to retail investors by lowering the per-share price, even though it does not change the underlying valuation [9] ServiceNow's Stock Performance - ServiceNow's stock has gained over 4,000% since its IPO in 2012 and is currently trading near all-time highs [3][6] - The company's shares soared by 50% in 2024, significantly outperforming both the S&P 500 and Nasdaq Composite indices [13] ServiceNow as a Stock Split Candidate - With a current share price of approximately $1,000, ServiceNow is considered a prime candidate for a stock split [13] - The company has never completed a stock split in its history as a public company, despite its market-beating performance and rising share price [4] ServiceNow's Growth Prospects - ServiceNow is positioned as a compelling opportunity for AI investors, with significant upside potential due to the rising importance of AI in enterprise software [5][12] - The company is a growth stock focused on customer acquisition and cross-selling, with profitability trends often being volatile due to reinvestment in R&D and sales/marketing [10] Valuation Considerations - ServiceNow is trading at a premium to its five-year average EV/Revenue ratio, reflecting ongoing valuation expansion [11] - Traditional profit-based valuation methodologies like P/E may not be entirely appropriate for ServiceNow due to its growth-focused dynamics [14]

Stock Performance and Growth Potential - ServiceNow's stock price has increased by 60% from its low in late 2024 and 200% since 2022, with potential for another 20% growth [1] - The company's growth is slowing in 2024 but remains strong in the low 20% range, expected to continue for the next three to five years [1] - Analysts predict a potential move to $1300, representing a 25% gain from early-January lows [5] Analyst Sentiment and Price Targets - Analysts have raised price targets ahead of ServiceNow's Q4 release, with a consensus Moderate Buy rating and growing conviction for new highs in 2025 [3] - Notable firms like Wells Fargo, Raymond James, and JPMorgan Chase have the stock on critical watchlists, tracking it for above-average growth and value [5] Financial Health and Balance Sheet - ServiceNow's balance sheet is strong, with net cash, ultra-low leverage, and declining liabilities, supporting growing cash flow and shareholder value [7] - Total liabilities fell more than 6% in Q3 while assets rose, increasing shareholder equity by nearly 22% year-over-year [7] - Long-term forecasts include accelerated share buybacks and potential dividend distributions [7] Institutional Activity and Market Support - Institutions own over 85% of ServiceNow's stock and have been buying on balance every quarter in 2024, providing strong support [11] - However, there were net sales reported in the first two weeks of 2025, raising concerns about the sustainability of the uptrend [11] Technical Outlook - ServiceNow's stock price pulled back from a peak in late 2024 but the uptrend remains intact, with critical support near $950 [12] - Indicators suggest market strength is building, with potential for new highs in 2025, though there is a risk of entering a trading range [12] AI and Industry Positioning - ServiceNow is well-positioned to benefit from the growing adoption of AI services, with end-to-end solutions adaptable across industry verticals [2] - The company's ability to monetize AI and drive adoption is seen as industry-leading, with decades of growth potential [2] Revenue and Growth Drivers - ServiceNow's Q3 guidance indicated nearly 22% year-over-year growth, driven by increasing client count, growth of large clients, and service penetration [6] - RPO growth exceeded 26% in Q3, a key metric for future revenue growth, with the market watching for stability or further growth in this area [6]

ServiceNow (NOW) closed the latest trading day at $1,049.08, indicating a -0.48% change from the previous session's end. This change lagged the S&P 500's daily gain of 0.16%. Meanwhile, the Dow gained 0.25%, and the Nasdaq, a tech-heavy index, lost 0.06%.The maker of software that automates companies' technology operations's stock has dropped by 8.55% in the past month, falling short of the Computer and Technology sector's loss of 0.39% and the S&P 500's loss of 2.7%.The investment community will be closely ...

In the latest market close, ServiceNow (NOW) reached $1,099.11, with a -0.58% movement compared to the previous day. The stock's change was less than the S&P 500's daily loss of 0.04%. Meanwhile, the Dow experienced a rise of 0.07%, and the technology-dominated Nasdaq saw a decrease of 0.05%.The maker of software that automates companies' technology operations's shares have seen an increase of 6.16% over the last month, surpassing the Computer and Technology sector's gain of 5.93% and the S&P 500's gain of ...

Investment Rating - The report assigns an "Outperform" rating to ServiceNow (NOW.N) for the first time [19] Core Views - ServiceNow is a global leader in workflow automation, actively exploring AI integration to unlock growth opportunities [15] - The company has a strong partnership with NVIDIA, co-developing native AI agents on the Now Platform [75] - ServiceNow's latest platform update, Xanadu, significantly expands AI capabilities and integrates with Microsoft Copilot [26] - The company has raised its full-year 2024 guidance, expecting subscription revenue of $10.655-10.66 billion, up 23% YoY [54] Financial Performance - Q3 2024 revenue reached $2.797 billion, up 22% YoY, with subscription revenue of $2.715 billion, exceeding guidance by 2 percentage points [29] - Non-GAAP operating margin exceeded 31%, surpassing guidance by 1.5 percentage points [29] - FY2024 Q3 gross margin was 79.12%, up 0.29 percentage points YoY, with net margin at 15.45%, up 4.87 percentage points YoY [34] - Remaining Performance Obligations (RPO) reached $19.5 billion in Q3 2024, up 36% YoY, while Current RPO (CRPO) was $9.36 billion, up 26% YoY [27] AI Integration and Platform Development - ServiceNow launched Now Assist, a generative AI solution that enhances productivity across IT, customer service, HR, and development workflows [25] - The Xanadu platform update introduced over 350 new AI features, including automated data visualization and email response generation [26] - Now Assist for Creator converts natural language into high-quality code suggestions, enabling faster application development [25] - The company has integrated Microsoft Copilot into its platform, allowing users to automate internal processes seamlessly [26] Market Opportunity and Growth - The global technical services market is expected to grow from $24.9 billion in 2023 to $123.5 billion by 2030, representing a CAGR of 17.4% [86] - ServiceNow's subscription revenue is projected to grow at a CAGR of 22% from 2024 to 2026, reaching $16.134 billion by 2026 [64] - The company's AI solutions are rapidly expanding across industries, with significant growth in technology, media, telecom, retail, and hospitality sectors [27] Valuation - The report uses a PS-based valuation method, assigning ServiceNow a 2025 PS multiple of 19-20x, implying a market cap range of $256.18-269.66 billion [66][67] - Comparable companies include CrowdStrike, Salesforce, The Trade Desk, and Cloudflare, with an average 2025 PS of 20x [66]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify effective metrics for assessing stock momentum [2] Group 2: ServiceNow (NOW) Analysis - ServiceNow currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [3][4] - Over the past week, ServiceNow shares increased by 7.14%, while the Zacks Computers - IT Services industry remained flat [7] - In the last month, ServiceNow's shares rose by 10.45%, outperforming the industry's 4.28% [7] - Over the past quarter, ServiceNow shares have risen by 24.93%, and by 68.79% over the last year, compared to the S&P 500's increases of 8.43% and 31.8%, respectively [8] Group 3: Trading Volume and Earnings Outlook - The average 20-day trading volume for ServiceNow is 1,207,265 shares, indicating a bullish sign with rising stock prices [9] - In terms of earnings estimates, 11 estimates have been revised upwards in the last two months, increasing the consensus estimate from $13.81 to $13.87 [11] - For the next fiscal year, 7 estimates have moved upwards while 5 have been revised downwards [11] - Overall, ServiceNow is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [12]

Core Viewpoint - ServiceNow's stock has appreciated significantly, driven by its expanding Generative AI portfolio, strong partner collaborations, and increasing clientele, outperforming the broader market and industry benchmarks [1][2]. Group 1: Stock Performance - ServiceNow shares have increased by 60.3% over the past 12 months, compared to 34.7% for the Zacks Computer & Technology sector and 20% for the Zacks Computers – IT Services industry [1]. - The stock is currently trading above both the 50-day and 200-day moving averages, indicating a bullish trend [2][3]. Group 2: Generative AI and Clientele Expansion - ServiceNow is leveraging AI and machine learning to enhance its solutions, with its total addressable market projected to reach $275 billion by 2026 [8]. - The recent Xanadu update introduces AI-powered solutions across various sectors, including telecom, financial services, and public sector [8][9]. - The integration of Agentic AI is expected to enhance productivity and issue resolution for Customer Service Management and IT Service Management [10]. - ServiceNow plans to add over 150 GenAI innovations to its platform, including AI governance features to ensure secure AI practices [11]. - As of Q3 2024, ServiceNow had 2,020 customers with annual contract values exceeding $1 million, with significant growth in high-value contracts [11][12]. Group 3: Strategic Partnerships - ServiceNow has expanded its collaboration with Amazon Web Services to enhance AI-driven business transformation [13]. - The partnership with Microsoft aims to modernize business processes through the integration of Microsoft Copilot and ServiceNow AI agents [14]. - Additional partnerships with companies like Visa, Snowflake, and IBM are expected to further enhance ServiceNow's market share [15]. Group 4: Financial Guidance and Performance - For 2024, ServiceNow expects subscription revenues between $10.655 billion and $10.66 billion, reflecting a 23% increase from 2023 [16]. - Projected subscription revenues for Q4 2024 are between $2.875 billion and $2.88 billion, indicating a year-over-year growth of 21.5-22% [17]. - The Zacks Consensus Estimate for 2024 earnings is $13.87 per share, representing a 28.66% year-over-year increase [18]. Group 5: Liquidity and Valuation - ServiceNow reported a cash balance of $5.295 billion as of September 30, 2024, with a free cash flow of $471 million in Q3 2024 [20]. - The company expects a free cash flow margin of 31% for 2024, allowing for growth opportunities such as acquisitions and share repurchases [21]. - ServiceNow's stock is trading at a premium valuation, with a forward Price/Sales ratio of 18.08X, significantly higher than the sector average [22][24].

Core Viewpoint - Varonis Systems, Inc. has expanded its data security coverage to include ServiceNow, enhancing its ability to discover, classify, and resolve data risks within the platform [1][4]. Group 1: Company Developments - The integration with ServiceNow allows Varonis to continuously discover and classify critical data, addressing issues related to data risk and overexposure [1]. - Varonis has recently added Google Cloud and Databricks to its coverage portfolio, along with automated remediation capabilities for Salesforce, demonstrating its commitment to reducing cloud data security risks [4]. - Varonis provides a unified view into data across various environments, enabling IT and security teams to improve their cloud data security posture [3][6]. Group 2: Industry Context - ServiceNow's platform is a prime target for attackers due to its handling of business-critical data and extensive customization options, which can lead to misconfigured access controls [2]. - Varonis aims to simplify the security of sensitive data within ServiceNow, offering a centralized management solution for posture and policies across all SaaS applications and cloud services [5]. - The company emphasizes the importance of a comprehensive approach to data security, as piecemeal solutions can create vulnerabilities that attackers may exploit [5].

Core Insights - Tech Mahindra has announced the integration with ServiceNow to launch the One E2E Platform, aimed at enhancing operational efficiency and competitiveness for enterprises by incorporating GenAI capabilities into critical business processes [1][2] - The collaboration focuses on joint go-to-market strategies to accelerate digital transformation across various industries, including communications, manufacturing, BFSI, and healthcare [2][4] Company Initiatives - Tech Mahindra plans to double its ServiceNow certifications within 12 months through a learning initiative that provides free certification to its workforce, ensuring they are prepared for future challenges [3] - The partnership aims to leverage Tech Mahindra's domain expertise and ServiceNow's capabilities to deliver advanced solutions that optimize network operations and enhance customer experiences [2][4] Industry Impact - The One E2E Platform will integrate advanced analytics, GenAI, and automation to facilitate operational efficiencies, thereby driving business growth for global enterprises [2][5] - Ahlstrom, a client of Tech Mahindra, has successfully utilized the ServiceNow offerings to optimize workflows and enhance service delivery, showcasing the effectiveness of the partnership [4][5]

Summary of ServiceNow, Inc. Conference Call Company Overview - **Company**: ServiceNow, Inc. (NYSE: NOW) - **Date**: December 11, 2024 - **Participants**: Gina Mastantuono (CFO), Raimo Lenschow (Barclays) Key Points Industry Insights - **Post-Election Sentiment**: There is a notable increase in small business sentiment, reported as the highest in three years, indicating a positive shift in the economic environment [5][7] - **IT Spending Outlook**: Expectations for IT spending into 2025 are stronger than the previous year, with CIO surveys reflecting a more favorable spending environment [7][8] Company Performance - **Pipeline Generation**: ServiceNow's pipeline generation has been strong, particularly through customer events and forums, leading to optimism for Q4 and 2025 [10][11] - **AI Investment**: ServiceNow has been investing in AI for years, with the Pro Plus SKUs being the fastest-growing product introduction in the company's history, indicating strong monetization potential [14][15] Product and Pricing Strategy - **Pro Plus SKU Performance**: The Pro Plus SKU has shown a pricing uplift of around 30%, with significant customer engagement, including 44 customers paying over $1 million [15][19] - **Value Proposition**: ServiceNow emphasizes a value-driven pricing model, where the majority of value generated goes to customers, maintaining a strong pricing strategy without over-discounting [20][21] Market Opportunities - **Expansion into New Markets**: ServiceNow is focusing on expanding its presence in various sectors, including federal, public sector, and international markets, with a strong emphasis on digitization and efficiency [35][36] - **Industry-Specific Solutions**: The company is developing tailored solutions for specific industries, enhancing its ability to address unique customer needs [34] Financial Discipline - **Growth and Profitability Balance**: ServiceNow maintains a disciplined approach to growth and profitability, leveraging its platform's inherent efficiencies to drive margins while expanding [40][41] - **Sales and Marketing Strategy**: The company plans to continue investing in sales and marketing headcount to capitalize on market opportunities, demonstrating agility in its hiring model [45][46] M&A Strategy - **M&A Considerations**: ServiceNow remains open to strategic acquisitions that drive customer value, but the focus is primarily on organic growth, with high hurdles for larger acquisitions [48][49] Conclusion - **Overall Outlook**: ServiceNow expresses cautious optimism for the upcoming year, driven by strong pipeline generation, effective pricing strategies, and a commitment to innovation and customer value [8][15][49]