3 Reasons Why Growth Investors Shouldn't Overlook ServiceNow (NOW)

Core Viewpoint - Growth investors are increasingly focused on identifying stocks with above-average financial growth, which can lead to solid returns, but finding such stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - ServiceNow (NOW) is highlighted as a recommended growth stock based on the Zacks Growth Style Score, which evaluates a company's real growth prospects beyond traditional metrics [2] - The company has a favorable Growth Score and a top Zacks Rank, indicating strong potential for growth investors [2] Group 2: Earnings Growth - ServiceNow has a historical EPS growth rate of 54.5%, with projected EPS growth of 28.1% for the current year, significantly outperforming the industry average of 7.7% [4] - Double-digit earnings growth is preferred by growth investors as it signals strong prospects and potential stock price gains [3] Group 3: Cash Flow Growth - The year-over-year cash flow growth for ServiceNow is currently at 33%, which is substantially higher than the industry average of -13.1% [5] - Over the past 3-5 years, the company's annualized cash flow growth rate has been 33.5%, compared to the industry average of 9.1% [6] Group 4: Earnings Estimate Revisions - The current-year earnings estimates for ServiceNow have been revised upward, with the Zacks Consensus Estimate increasing by 5.2% over the past month [8] - Positive trends in earnings estimate revisions are correlated with near-term stock price movements, indicating potential for further growth [7] Group 5: Investment Potential - The combination of a strong earnings estimate revision trend and solid growth metrics positions ServiceNow as a potential outperformer and a solid choice for growth investors [9]