ServiceNow Components (NYSE: NOW) gained more than 8% on April 28, after the company delivered positive results in the first quarter beyond the high end of its guidance.
Investors appreciated the raised mid-point of the 2022 subscription revenue guide as well as an accelerated growth outlook.
Based in Santa Clara, California, ServiceNow is a software company that has developed a cloud computing platform to help companies manage digital workflows for enterprise operations.
Q1 Beat
Fixed earnings of $ 1.73 per share exceeded analysts ’expectations of $ 1.70 per share. The company reported earnings of $ 1.52 per share for the previous period of the year.
Furthermore, revenues jumped 27% year-over-year to $ 1.72 billion and exceeded consensus estimates of $ 1.7 billion. The increase in revenues reflects an increase in Subscription revenues, which rose 26% to $ 1.63 billion.
FY2022 Outlook
Based on solid Q1 results, management updated the financial guidance for FY2022.
The company raised the mid-point of its Q2FY22 Subscription revenues guidance from $ 1.67 billion to $ 1.675 billion. Furthermore, it expects to accelerate growth of 29% year-over-year on a consistent monetary basis.
For the full year, subscription revenues are expected to grow 28.5% per year to range from $ 7.025 billion to $ 7.040 billion.
CEO Comments
ServiceNow CEO Bill McDermott said, “We’re in a sustainable environment of demand. Companies are investing with a sense of urgency in technologies that give them the right results, quickly. It’s very clear that there’s no going back. businesses in the ‘status quo.’ We are now in the tech-to-compete world. ”
Taking on Wall Street
Following solid Q1 results, RBC Capital analyst Matthew Hedberg raised ServiceNow’s price target to $ 670 (32.93% upside potential) from $ 660 and reiterated a Buy rating.
Turn to Wall Street, the analyst agreed ServiceNow is also optimistic, with a Strong Buy rating based on 17 Buys, a Hold and a Sell. ServiceNow’s average price target of $ 649.84 indicates a potential increase of 28.93%.
Bloggers Weigh In
TipRanks data shows that Financial blogger opinions are 82% Bullish on NOW stocks, compared to the sector average of 68%.
Bottom-Line
Despite many macro headwinds, ServiceNow delivered excellent performance, surpassing the high end of the guide across all Q1 2022 metrics.
The solid revenue growth outlook reflects the stability of the business as well as customer demand, which foreshadows well for the stock in the long run.
Discover new investment ideas using data you can trust.
Read the full Disclaimer and Disclosure
Related News:
Despite Bottlenecks, Ford Posts Quarterly Beat
Why Did Vertiv Holdings Gain 11.5% Shares?
Why Warner Bros. Dropped 5% Discovery Shares?