ServiceNow Inc (NOW) has shown impressive financial strength, exceeding expectations for its third quarter. The company announced revenue of $2.797 billion, surpassing the consensus estimate of $2.743 billion. This strong performance was further solidified by their adjusted earnings per share, which came in at $3.72, outperforming analyst estimates of $3.46.
Bill McDermott, Chairman and CEO of ServiceNow, expressed his enthusiasm about the results, attributing the momentum to both existing and new customers increasing their investments in ServiceNow’s AI platform for business transformation.
The positive outlook for ServiceNow is reflected in the company’s guidance. They anticipate subscription revenue of $2.875 billion to $2.88 billion for the fourth quarter. Furthermore, their full-year subscription revenue guidance is set at $10.655 billion to $10.66 billion, although slightly lower than the analyst estimate of $10.806 billion.
The strong earnings announcement has prompted analysts to raise their price targets on ServiceNow stock.
* Needham’s Mike Cikos maintained a Buy rating on ServiceNow and increased the price target from $900 to $1,075.
* Canaccord Genuity’s David Hynes also maintained a Buy rating and raised the price target from $850 to $1,000.
* Baird’s Rob Oliver affirmed an Outperform rating on the stock and increased the price target from $900 to $975.
* Lastly, JP Morgan’s Mark Murphy maintained an Overweight rating and boosted the price target from $820 to $950.
This wave of positive analyst sentiment underscores the strong performance and promising future of ServiceNow. The company’s focus on AI-driven solutions for business transformation seems to be resonating with customers, driving growth and attracting favorable market reactions. Investors looking for exposure to the growing technology sector should certainly consider ServiceNow (NOW) as a potential addition to their portfolios.