Exploring ServiceNow's Earnings Expectations
ServiceNow (NYSE:NOW) is set to give its latest quarterly earnings report on Wednesday, 2025-07-23. Here's what investors need to know before the announcement.
Analysts estimate that ServiceNow will report an earnings per share (EPS) of $2.82.
Investors in ServiceNow are eagerly awaiting the company's announcement, hoping for news of surpassing estimates and positive guidance for the next quarter.
It's worth noting for new investors that stock prices can be heavily influenced by future projections rather than just past performance.
Past Earnings Performance
During the last quarter, the company reported an EPS beat by $0.20, leading to a 15.49% increase in the share price on the subsequent day.
Here's a look at ServiceNow's past performance and the resulting price change:
| Quarter | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 |
|---|---|---|---|---|
| EPS Estimate | 3.84 | 3.66 | 3.46 | 2.84 |
| EPS Actual | 4.04 | 3.67 | 3.72 | 3.13 |
| Price Change % | 15.0% | -11.0% | 5.0% | 13.0% |
Tracking ServiceNow's Stock Performance
Shares of ServiceNow were trading at $959.91 as of July 21. Over the last 52-week period, shares are up 32.09%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.
Analysts' Perspectives on ServiceNow
Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on ServiceNow.
Analysts have provided ServiceNow with 34 ratings, resulting in a consensus rating of Outperform. The average one-year price target stands at $1072.03, suggesting a potential 11.68% upside.
Peer Ratings Comparison
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 $214.0, suggesting a potential 77.71% downside.
- Analysts currently favor an Outperform trajectory for CrowdStrike Holdings, with an average 1-year price target of $487.55, suggesting a potential 49.21% downside.
- Analysts currently favor an Neutral trajectory for Fortinet, with an average 1-year price target of $108.5, suggesting a potential 88.7% downside.
Peers Comparative Analysis Summary
The peer analysis summary outlines pivotal metrics for Palo Alto Networks, CrowdStrike Holdings and Fortinet, demonstrating their respective standings within the industry and offering valuable insights into their market positions and comparative performance.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|---|---|---|---|---|
| ServiceNow | Outperform | 18.63% | $2.44B | 4.66% |
| Palo Alto Networks | Outperform | 15.33% | $1.67B | 3.85% |
| CrowdStrike Holdings | Outperform | 19.80% | $814.29M | -3.27% |
| Fortinet | Neutral | 13.77% | $1.25B | 25.08% |
Key Takeaway:
ServiceNow ranks at the top for Revenue Growth and Gross Profit among its peers. However, it has the lowest Return on Equity.
About ServiceNow
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.
Unraveling the Financial Story of ServiceNow
Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.
Revenue Growth: ServiceNow displayed positive results in 3 months. As of 31 March, 2025, the company achieved a solid revenue growth rate of approximately 18.63%. This indicates a notable increase in the company's top-line earnings. When compared to others in the Information Technology sector, the company excelled with a growth rate higher than the average among peers.
Net Margin: ServiceNow's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 14.9%, the company showcases strong profitability and effective cost management.
Return on Equity (ROE): ServiceNow's ROE stands out, surpassing industry averages. With an impressive ROE of 4.66%, the company demonstrates effective use of equity capital and strong financial performance.
Return on Assets (ROA): ServiceNow's ROA surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 2.22% ROA, the company effectively utilizes its assets for optimal returns.
Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.24.
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.
