Service Today (NOW – Free Report) is scheduled to release its third quarter 2022 results on Oct 26.
The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $1.85 billion, up 22.66% from the figure reported last quarter.
The consensus score for third quarter earnings has been stable at $1.85 per share over the past 30 days, indicating growth of 19.35% from the figure reported last quarter.
ServiceNow’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 5.47%.
Let’s take a look at how things are shaping up for ServiceNow ahead of this announcement.
Factors at Play
ServiceNow’s third quarter results are expected to benefit from strong adoption of its workflow solutions by businesses amid the accelerated digital transformation trend brought on by the pandemic.
For the third quarter of 2022, subscription revenues are expected to be between $1.750 billion and $1.755 billion, suggesting an improvement of 27.5% year over year on a non-GAAP basis.
Top-line growth is likely driven by the company’s robust product portfolio and strong demand for the Now Platform in the to-be-reported quarter.
ServiceNow’s expanding global presence, strong partner base and strategic buyouts are expected to boost top-line growth in the third quarter of 2022. However, unfavorable forex is expected to weigh on the top-line growth in the to-be-reported quarter.
Key Developments of the Quarter
During the reporting quarter, ServiceNow announced the Now Platform Tokyo release, designed to help organizations navigate complex business challenges amid an uncertain macro environment. The release features tools related to Enterprise Asset Management, Supplier Lifecycle Management and ESG Management. It also offers tools like Manager Hub, Admin Center and Issue Auto Resolution for Human Resources, helping businesses in talent development and retention.
Additionally, the Now Platform Tokyo release includes ServiceNow Vault as well as new AI-powered tools such as Task Intelligence for Customer Service Management, Automation Center, DevOps Config, Operational Resilience Management and ITSM Pro+. These solutions help organizations operate more efficiently and enable more stable business models.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the probability of an earnings beat. But that’s not the case here.
ServiceNow has an Earnings ESP of -0.36% and a Zacks Rank #3. You can discover the best stocks to buy or sell before they are reported in our ESP Income Filter.
Stocks to Consider
Here are some companies to consider, as our model shows that they have the right combination of elements to beat earnings with their upcoming releases:
Perion Network (PERI – Free Report) has an Earnings ESP of +10.58% and sports a Zacks Rank of 1, currently. You can find a complete list of today’s Zacks #1 Rank stocks here.
Perion shares are down 3.1% year to date. PERI is scheduled to report its third quarter 2022 results on Nov 9.
ZoomInfo (ZI – Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2.
Shares of ZoomInfo are down 30% on a year-to-date basis. ZI is scheduled to report its third quarter 2022 results on Nov 1.
Apple (AAPL – Free Report) has an Earnings ESP of +0.79% and a Zacks Rank #3.
Apple shares are down 19.2% year to date. AAPL is scheduled to report its fiscal 2022 fourth quarter results on Oct 27.
Stay tuned to upcoming earnings announcements with the Zacks Earnings Calendar.