ServiceNow (NOW) Q4 Earnings Report: Key Things to Watch For

ServiceNow, a leading enterprise workflow automation company, is gearing up to release its fourth-quarter earnings report this week. The previous quarter saw ServiceNow exceed revenue expectations by 1.4%, with a revenue of $3.41 billion, marking a 21.8% increase from the previous year. While the quarter was deemed satisfactory, the company outperformed analysts’ EBITDA estimates but fell short of billings estimates.

In terms of what to expect from this quarter, analysts are projecting a 19.4% year-on-year revenue growth for ServiceNow, estimating revenue to reach $3.53 billion. This growth rate is slightly slower than the 21.3% increase recorded in the same quarter the previous year. Adjusted earnings are expected to be around $0.89 per share.

Analysts who cover ServiceNow have largely maintained their estimates in the past month, suggesting a consensus that the company is on track as it heads into earnings season. ServiceNow has a solid track record of only missing Wall Street’s revenue estimates once in the past two years, surpassing top-line expectations by an average of 1.1%.

As a trendsetter in its industry, ServiceNow’s earnings report will offer valuable insights into how the productivity software sector may fare this season. Although the broader sector has experienced a recent sell-off, ServiceNow’s peer group stocks have dropped by an average of 6.8% in the past month. ServiceNow itself has seen an 11.4% decrease during the same period and is currently trading below the average analyst price target of $206.29, with a current share price of $136.99.

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