William Huston, AIF®, AIFA®

ServiceNow shares to soar after gains in 2022 market correction.

William Huston, AIF®, AIFA®

William Huston, AIF®, AIFA®

ServiceNow shares to soar after gains in 2022 market correction.

ServiceNow shares rose after the software provider reported fourth-quarter earnings and revenue that beat Wall Street expectations. NOW stock's 2022 earnings forecast beat analysts' estimates. ServiceNow of Santa Clara, CA, released its fourth-quarter results after the bell Wednesday.

"The fourth quarter posted a healthy outperformance across the board," Jefferies analyst Samad Samana said in a report. "Guidance had some noise, but delivered on what mattered most: the 2022 subscriber revenue growth outlook of 28% (growth) implies no slowdown from 2021. On a comparable basis, operating margin guidance was below consensus, but in line with our estimate and management's earlier commentary."

ServiceNow's earnings grew 25% year over year to an adjusted $1.46 per share. ServiceNow said revenue grew 29% to $1.61 billion. A year ago, ServiceNow earned $1.17 per share selling $1250 million. Analysts expect ServiceNow to report $1.43 in revenue per share on revenue of $1.6 billion for the period ended Dec. 31. In addition, ServiceNow said subscription revenue rose 29% to $1.523 billion, beating estimates of $1.52 billion.

ServiceNow stock: tends to consider the earnings outlook

ServiceNow jumped 12.2% today to 543.53 in early trading. NOW shares were down 25% in 2022 ahead of the earnings report. The software industry has been hit hard so far in 2022. The IShares Expanded Technology Software ETF (IGV) is down 15% this year.

The enterprise software developer said it expects subscription revenue to be between $7.02 billion and $7.04 billion by 2022. Analysts forecast subscription revenue of $7.015 billion and an operating margin of 24.7%. ServiceNow says it expects an operating margin of about 25%.

In December, ServiceNow announced that it "completed 135 contracts with an annual net new contract value in excess of $1 million, up 52% from the prior year." The company currently has 1,359 customers with an annual contract value of more than $1 million." The company's software tracks and manages the services provided by the IT department. A self-service technology portal that allows the company's employees to access management tools and workflows.

In addition, ServiceNow expands its core business to include human resources, customer service management and security software.


Krause, R. (2022, January 27). ServiceNow Stock Pops On Earnings Report Amid 2022 Market Correction. Investor’s Business Daily. Retrieved January 27, 2022, from https://www.investors.com/news/technology/servicenow-stock-pops-on-earnings-report-amid-2022-market-correction/?src=A00220


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