Stock Story -
Enterprise workflow software maker ServiceNow (NYSE:NOW) will be reporting results tomorrow after market hours. Here's what to expect.
ServiceNow met analysts' revenue expectations last quarter, reporting revenues of $2.60 billion, up 24.2% year on year. It was a weak quarter for the company, with decelerating growth in large customers and a miss of analysts' ARR (annual recurring revenue) estimates. It added 36 enterprise customers paying more than $1m annually to reach a total of 1,933.
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This quarter, analysts are expecting ServiceNow's revenue to grow 21.4% year on year to $2.61 billion, slowing from the 22.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.84 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. ServiceNow has missed Wall Street's revenue estimates three times over the last two years.
With ServiceNow being the first among its peers to report earnings this season, we don't have anywhere else to look to get a hint at how this quarter will unravel for productivity software stocks. However, there has been positive investor sentiment in the segment, with share prices up 6.5% on average over the last month. ServiceNow is up 2.3% during the same time and is heading into earnings with an average analyst price target of $852.6 (compared to the current share price of $756.7).
![Earnings To Watch: ServiceNow (NOW) Reports Q2 Results Tomorrow](https://d68-invdn-com.investing.com/content/picb4052946152e1d935d170d23832e8490.jpeg)