ServiceNow, Inc. (NYSE:NOW) plans to announce its third-quarter earnings results on October 28, 2020.
The company expects earnings per share of 1.03 US dollars and revenue of 1.111 billion US dollars. The consensus earnings per share (EPS) of US$1.03 per share is based on a survey of 31 analysts. Compared with the same period last year, earnings per share increased by 4.2%, when the company reported earnings per share of US$0.99.
According to the survey of 28 analysts, the revenue forecast is 1.111 billion US dollars, which means that revenue has increased by 25.4% year-on-year. Last year the company reported revenue of $885.8 million for the quarter.
| Metric | expected | last year | Year-on-year change |
|---|---|---|---|
| income | $ 1,110.84 | $ 885.83 | 25.4% |
| Earnings per share | $ 1.03 | $0.99 | 4.2% |
Earning phone trends
In the past, management has been good at managing analyst expectations. The company has achieved a perfect record of exceeding revenue expectations in the past eight quarters.
What are your expectations for ServiceNow, Inc.’s revenue this quarter? Let us know in the comments!
| 25 cent coin | expected | Reported | Surprise | result |
|---|---|---|---|---|
| The second quarter of 2020 | $ 1.02 | $1.23 | 20.9% | beat |
| The first quarter of 2020 | $ 0.95 | $ 1.05 | 10.2% | beat |
| 2019 Q4 | $ 0.87 | $ 0.96 | 10.1% | beat |
| Q3 2019 | $ 0.89 | $0.99 | 11.8% | beat |
| The second quarter of 2019 | $ 0.64 | $ 0.71 | 11.8% | beat |
| Q1 2019 | $0.54 | $ 0.67 | 23.6% | beat |
| Q4 2018 | $ 0.63 | $ 0.77 | 21.6% | beat |
| The third quarter of 2018 | $0.59 | $ 0.68 | 14.6% | beat |
In the table below, we summarize the company’s stock price trend after the earnings release. The “Prior Price Day” column shows the closing price of the day before the earnings report, and the “Next Day of Price” column shows the stock price at the end of the trading day after the earnings report. After the release of the last earnings report as of June 30, 2020, the stock price did not react much to this update.
| Report date | Price day | Price for the next day | change% | result |
|---|---|---|---|---|
| July 29, 2020 | $ 435.04 | $ 431.40 | −0.8% | decline |
| April 29, 2020 | $ 296 | $351.54 | 18.8% | increase |
| January 29, 2020 | $314.05 | $ 341.62 | 8.8% | increase |
| October 23, 2019 | $ 228.34 | $237.78 | 4.1% | increase |
Another issue to consider is one of revenue manipulation. Every quarter, management faces tremendous pressure to achieve expected earnings. Beneish M-Score is a statistical model that provides some insights on whether the company may manipulate earnings. The B difference M score of this model is -2.71, indicating that the company is unlikely to become a revenue manipulator. A value of -2.71 means there is a 0.3% chance of income manipulation.
Basic principles and technical analysis
The current trading price of ServiceNow, Inc. is $518.19 per share, down -0.7% that day. The company’s share price is approximately 97.2% of its 52-week high of $533.37 per share. Since the last financial report, the company’s stock price has risen 20.1%, which is a 0.3% increase over the previous week.
The company’s 14-day relative price index (RSI) is 65.73, indicating that the company is trading in a technology-neutral zone. RSI above 70 is considered overbought, and below 30 is considered oversold.
Source: Finbox
The current stock price implies a P/E ratio of 136.46 and a forward P/E ratio of 113.77.
The current share price of ServiceNow, Inc. also means that its price to book ratio (P/B) is 40.10. The following table summarizes some other key basic ratios:
| Metric | value |
|---|---|
| Key to the financial period of the last report | Second quarter of fiscal year 2020 |
| End date | June 30, 2020 |
| Stock price (current) | $518.19 |
| P/E ratio | 136.5 times |
| Price-earnings ratio (Fwd) | 113.8 times |
| PEG ratio | 0.0 |
| Total debt/total capital | 1.2% |
| Leveraged free cash flow | $1.129 billion |
| EV / EBITDA | 198.3 times |
Fin box
ServiceNow, Inc. is a large stock with a market value of 99.389 billion US dollars and a total enterprise value of 98.245 billion US dollars. The company operates in the information technology field and the software industry.
ServiceNow, Inc. provides enterprise cloud computing solutions to define, organize, integrate, manage and automate services for global enterprises. The company provides information technology (IT) service management applications; and digital workflow products for customer service, human resources, security operations, integrated risk management, and other corporate departments. It runs the Now platform, which provides workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analysis, encryption, and collaboration and development tools. The company also provides IT service management product suites for employees, customers and partners; IT operations management products that connect customers’ physical and cloud-based IT infrastructure with applications and platforms; IT asset management products that can Automate the life cycle of IT assets through workflow; IT business management product suite for managing IT priorities; and enterprise development and operation products for developer tool chains. In addition, it provides customer service management products for customer service cases and requirements; human resource service delivery products; safe operation products for third-party safe operation management requirements; governance, risk and compliance products to create policies and controls; and Field service management application. In addition, the company provides professional, training and customer support services; and certification programs. It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education and consumer products. The company sells its products through direct sales teams and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. The company was founded in 2004 and is headquartered in Santa Clara, California.
#ServiceNow #NYSENOW #quarter #revenue #preview #Bankers #Forum