Expect A Strong Quarter Out Of ServiceNow

D.A. Davidson expects a strong quarter from ServiceNow Inc NOW, which is expected to report its fourth-quarter numbers on Wednesday after market close.

The brokerage anticipates ServiceNow, an enterprise cloud company, to report Street-matching non-GAAP EPS of $0.23.

Further, D.A. Davidson sees revenue to grow 34.3 percent year-over-year to $383.5 million, slightly above consensus of $379.5 million and guidance calling for $376 million–$381 million. That said, currency fluctuations could be a modest headwind.

Analyst Commentary

“We note ServiceNow has beaten consensus revenue estimates in every quarter of its tenure as a public company, meeting or exceeding non-GAAP EPS in all but one,” analyst Jack Andrews wrote in a note.

Andrews projects fourth-quarter billings, which represent current quarterly revenues plus the sequential change in deferred revenue from the cash flow statement, to grow 32.6 percent to $485 million, ahead of company guidance calling for $474 million–$479 million.

The analyst pointed out that ServiceNow’s broader service management messaging continues to resonate with customers, while his checks suggest positive comments from channel partners such as Accenture Plc ACN and Computer Sciences Corporation CSC.

Andrews has a Buy rating and $102 price target on the shares, which closed Monday’s trading at $83.25.