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The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $2.09 billion, up 21.29% from the figure reported in the year-ago quarter.
The consensus mark for first-quarter earnings has increased a couple of cents to $2.04 per share over the past 30 days, indicating growth of 17.92% from the figure reported in the year-ago quarter.
ServiceNow’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.91%.
Let’s see how things are shaping up for ServiceNow prior to this announcement.
Factors at Play
ServiceNow’s first-quarter 2023 results are expected to benefit from expanding clientele. It has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
The availability of new solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — is helping the company win new customers. It had 1,637 total customers, with more than $1 million in annual contract value, at the end of the fourth quarter.
For first-quarter 2023, subscription revenues are projected between $1.99 billion and $2 billion, suggesting an improvement in the range of 22-22.5% year over year on a GAAP basis. At constant currency, subscription revenues are expected to grow in the 25-25.5% range.
ServiceNow’s expanding global presence, solid partner base and strategic buyouts are expected to have bolstered its top-line growth in the first quarter of 2023. However, unfavorable forex and raging inflation are expected to have hurt its top-line growth in the to-be-reported quarter.
Key Quarter Developments
During the to-be-reported quarter, ServiceNow announced the launch of Now Platform Utah, its latest version of the intelligent, end-to-end platform for digital transformation.
The AI-powered platform features robotic process automation capabilities, additional search enhancements, expanded Workforce Optimization, and Health and Safety Incident Management. These features are expected to enhance automation, simplify the work process and offer greater organizational agility to ServiceNow customers.
ServiceNow and AT&T announced a global telecom product to help communications service providers manage 5G and fiber network inventory.
AT&T provided strategic design and technical guidance for the development of the ServiceNow Telecom Network Inventory, which is built on the ServiceNow Platform.
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 odds of an earnings beat. That’s the exact case here.
ServiceNow has an Earnings ESP of +4.34% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few companies worth considering, as our model shows that these too have the right combination of elements to beat on earnings in their upcoming releases:
Image: Bigstock
ServiceNow (NOW) to Report Q1 Earnings: What's in the Cards?
ServiceNow (NOW - Free Report) is scheduled to release its first-quarter 2023 results on Apr 26.
The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $2.09 billion, up 21.29% from the figure reported in the year-ago quarter.
The consensus mark for first-quarter earnings has increased a couple of cents to $2.04 per share over the past 30 days, indicating growth of 17.92% from the figure reported in the year-ago quarter.
ServiceNow’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.91%.
ServiceNow, Inc. Price and EPS Surprise
ServiceNow, Inc. price-eps-surprise | ServiceNow, Inc. Quote
Let’s see how things are shaping up for ServiceNow prior to this announcement.
Factors at Play
ServiceNow’s first-quarter 2023 results are expected to benefit from expanding clientele. It has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
The availability of new solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — is helping the company win new customers. It had 1,637 total customers, with more than $1 million in annual contract value, at the end of the fourth quarter.
For first-quarter 2023, subscription revenues are projected between $1.99 billion and $2 billion, suggesting an improvement in the range of 22-22.5% year over year on a GAAP basis. At constant currency, subscription revenues are expected to grow in the 25-25.5% range.
ServiceNow’s expanding global presence, solid partner base and strategic buyouts are expected to have bolstered its top-line growth in the first quarter of 2023. However, unfavorable forex and raging inflation are expected to have hurt its top-line growth in the to-be-reported quarter.
Key Quarter Developments
During the to-be-reported quarter, ServiceNow announced the launch of Now Platform Utah, its latest version of the intelligent, end-to-end platform for digital transformation.
The AI-powered platform features robotic process automation capabilities, additional search enhancements, expanded Workforce Optimization, and Health and Safety Incident Management. These features are expected to enhance automation, simplify the work process and offer greater organizational agility to ServiceNow customers.
ServiceNow and AT&T announced a global telecom product to help communications service providers manage 5G and fiber network inventory.
AT&T provided strategic design and technical guidance for the development of the ServiceNow Telecom Network Inventory, which is built on the ServiceNow Platform.
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 odds of an earnings beat. That’s the exact case here.
ServiceNow has an Earnings ESP of +4.34% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few companies worth considering, as our model shows that these too have the right combination of elements to beat on earnings in their upcoming releases:
Meta Platforms (META - Free Report) has an Earnings ESP of +7.78% and sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Meta shares have gained 77.1% year to date. META is set to report its first-quarter 2023 results on Apr 26.
NETGEAR (NTGR - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank #2.
NETGEAR shares have declined 4.6% year to date. NTGR is set to report its first-quarter 2023 results on Apr 26.
Cloudflare (NET - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #2.
Cloudflare shares have gained 38.1% year to date. NET is set to report its first-quarter 2023 results on Apr 27.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.