Preview: ServiceNow's Earnings

ServiceNow NOW is set to give its latest quarterly earnings report on Wednesday, 2025-04-23. Here's what investors need to know before the announcement.

Analysts estimate that ServiceNow will report an earnings per share (EPS) of $3.83.

ServiceNow bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.

New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

Overview of Past Earnings

In the previous earnings release, the company beat EPS by $0.01, leading to a 11.44% drop in the share price the following trading session.

Here's a look at ServiceNow's past performance and the resulting price change:

ServiceNow Share Price Analysis

Shares of ServiceNow were trading at $755.99 as of April 21. Over the last 52-week period, shares are up 1.75%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Observations about ServiceNow

For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding ServiceNow.

A total of 31 analyst ratings have been received for ServiceNow, with the consensus rating being Outperform. The average one-year price target stands at $1096.58, suggesting a potential 45.05% upside.

Analyzing Ratings Among Peers

This comparison focuses on the analyst ratings and average 1-year price targets of Palo Alto Networks, CrowdStrike Holdings and Fortinet, three major players in the industry, shedding light on their relative performance expectations and market positioning.

• Analysts currently favor an Outperform trajectory for Palo Alto Networks, with an average 1-year price target of $214.26, suggesting a potential 71.66% downside.
• Analysts currently favor an Outperform trajectory for CrowdStrike Holdings, with an average 1-year price target of $434.15, suggesting a potential 42.57% downside.
• Analysts currently favor an Neutral trajectory for Fortinet, with an average 1-year price target of $116.53, suggesting a potential 84.59% downside.

Peers Comparative Analysis Summary

The peer analysis summary provides a snapshot of key metrics for Palo Alto Networks, CrowdStrike Holdings and Fortinet, illuminating their respective standings within the industry. These metrics offer valuable insights into their market positions and comparative performance.

Key Takeaway:

ServiceNow ranks at the top for Revenue Growth among its peers. It is in the middle for Gross Profit. For Return on Equity, ServiceNow is at the bottom compared to its peers.

Get to Know ServiceNow Better

ServiceNow Inc provides software solutions to structure and automate various business processes via a SaaS delivery model. The company primarily focuses on the IT function for enterprise customers. ServiceNow began with IT service management, expanded within the IT function, and more recently directed its workflow automation logic to functional areas beyond IT, notably customer service, HR service delivery, and security operations. ServiceNow also offers an application development platform as a service.

ServiceNow: Delving into Financials

Market Capitalization Analysis: The company's market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.

Positive Revenue Trend: Examining ServiceNow's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 21.34% as of 31 December, 2024, showcasing a substantial increase in top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Information Technology sector.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 12.99%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): ServiceNow's ROE is below industry standards, pointing towards difficulties in efficiently utilizing equity capital. With an ROE of 4.06%, the company may encounter challenges in delivering satisfactory returns for shareholders.

Return on Assets (ROA): ServiceNow's ROA stands out, surpassing industry averages. With an impressive ROA of 1.98%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: With a below-average debt-to-equity ratio of 0.24, ServiceNow adopts a prudent financial strategy, indicating a balanced approach to debt management.

To track all earnings releases for ServiceNow visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.