Thinkhubstudio ServiceNow (NYSE:NOW) is a great recent example of why it can pay off to pay up for quality. The stock has delivered incredible returns over the past year and now trades at all-time highs. But has the stock run too far? The stock does trade at the higher end of my fair value range, but between the net cash balance sheet and GAAP profitability, the stock has earned a premium valuation. I still see market-beating returns ahead as the company moves into the mold of the next Microsoft (MSFT) or S ...

ServiceNow (NOW) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this maker of software that automates companies' technology operations have returned +13.3%, compared to the Zacks S&P 500 composite's +1.6% change. During this period, the Zacks Computers - IT Services industry, which ServiceNow falls in, has gained 4.7%. The key questi ...

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Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.Zacks Premium includes access to the Zacks Style Scores as well.What are the Zacks Style Scor ...

First-of-its-kind "power skills" partnership offers the critical skills needed to succeed in tech The program blends soft skills courses like communication, collaboration and analytical thinking with the necessary technical competencies SAN FRANCISCO and SANTA CLARA, Calif., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Udemy (NASDAQ:UDMY), a leading online skills marketplace and learning platform, and ServiceNow (NYSE:NOW), the leading digital workflow company making the world work better for everyone, today announced ...

ServiceNow (NYSE:NOW) stock is rising higher on Thursday as Wall Street analysts praise the cloud computing services company following its latest earnings report.Goldman Sachs, Bank of America Securities and UBS all reiterated “buy” ratings for NOW stock this morning. Goldman Sachs even increased its price target for the shares from $800 to $910.These are just a few of the analysts who weighed in on NOW stock this morning. Several others also reaffirmed positive ratings for the company following its earning ...

ServiceNow (NOW) reported fourth-quarter 2023 adjusted earnings of $3.11 per share, which beat the Zacks Consensus Estimate by 12.27% and jumped 36.4% year over year.Revenues of $2.44 billion beat the consensus mark by 1.67% and increased 25.6% year over year. At constant currency (cc), revenues increased 24%.Subscription revenues improved 27.2% year over year to $2.37 billion. At cc, subscription revenues increased 25.5% year over year.Professional services and other revenues decreased 10% year over year t ...

Financial Data and Key Metrics - Revenue for the current year is $8.7 billion, projected to grow to $10.575 billion next year, reflecting strong expansion rates [1] - Subscription revenue grew by 25.5% at constant currency, exceeding guidance by 200 basis points [32] - Current Remaining Performance Obligation (cRPO) grew by 23% at constant currency, also 200 basis points above guidance [32] - The company ended Q4 with $8.1 billion in cash and investments and repurchased 400,000 shares [13] - Free cash flow margin was 55%, up 250 basis points year-over-year, with total free cash flow for 2023 at $2.7 billion [91] Business Line Data and Key Metrics - Customer workflows crossed $1 billion in ACV in Q4, following Creator Workflows, which hit the same milestone in Q3 [90] - Gen AI products drove the largest net new ACV contribution in Q4, outperforming previous product family releases [12] - ITSM, ITOM, and ITAM each had double-digit deals over $1 million in Q4, with Security and Risk workflows also showing strong performance [24] - Employee workflows saw significant growth, with 80% year-over-year increase in net new ACV [53] Market Data and Key Metrics - Public sector growth remained strong, with key wins in the United States Army, US Postal Service, and Australian Department of Defense [6] - The company closed 168 deals greater than $1 million in net new ACV in Q4, a 33% increase year-over-year, including five deals over $10 million [12] - Energy and utilities, business and consumer services, and education sectors showed robust growth in Q4 [102] Company Strategy and Industry Competition - The company is positioning itself as the intelligent platform for end-to-end digital transformation, leveraging AI to drive growth [72] - ServiceNow is investing heavily in Gen AI, with early success in product adoption and customer demand [78] - The company is expanding its strategic partnerships, including with AWS and EY, to enhance AI capabilities and market reach [74][86] Management Commentary on Operating Environment and Future Outlook - Management highlighted the strong demand for Gen AI, with no price sensitivity due to the compelling business cases [3] - The company is optimistic about 2024, with AI expected to drive significant growth and transformation across industries [28] - ServiceNow is well-positioned to capitalize on the $3 trillion expected to be spent on AI between 2023 and 2027 [16] Other Important Information - The company has a renewal rate of 99%, demonstrating the strategic relevance of its platform [103] - ServiceNow is ranked as a leader in 14 separate reports by top analyst firms for its automation and AI capabilities [83] - The company is increasing hiring, particularly in R&D, to support innovation and Gen AI development [112] Q&A Session Summary Question: How is the demand environment for Gen AI impacting sales cycles and customer adoption? - The demand for Gen AI varies by industry, but the company is seeing faster sales cycles and strong customer pull, particularly in manufacturing and public sectors [138][118] - Gen AI products are driving significant net new ACV, with adoption curves steeper than previous product launches [180] Question: What is driving the outperformance in cRPO growth? - The cRPO growth beat was driven by a combination of net new ACV outperformance and early renewals, with Gen AI contributing significantly [175][149] Question: How is the company managing its sales capacity and efficiency? - Sales efficiency is improving, with fewer people needed to support quota-bearing sales reps due to increased productivity and automation [38][167] - The company is increasing hiring in R&D to drive innovation, while maintaining a balanced approach to sales and marketing headcount [166] Question: What are the expectations for Gen AI revenue contribution in 2024? - While it is still early days, Gen AI is expected to contribute to the $165 million increase in the 2024 revenue guidance, with adoption curves steeper than previous product launches [154][180] Question: How is the public sector adopting AI, and what is the trajectory? - Public sector adoption of AI is still in early stages, but the company expects significant growth in the second half of 2024, particularly in federal and state governments [197][221]

ServiceNow (NOW) reported $2.44 billion in revenue for the quarter ended December 2023, representing a year-over-year increase of 25.6%. EPS of $3.11 for the same period compares to $2.28 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $2.4 billion, representing a surprise of +1.68%. The company delivered an EPS surprise of +12.27%, with the consensus EPS estimate being $2.77.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and h ...

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