ServiceNow (NOW) Q1 Earnings Report Preview: What To Look For

Enterprise workflow software maker ServiceNow (NYSE:NOW) will be reporting results tomorrow after market hours. Here’s what to look for.

ServiceNow met analysts’ revenue expectations last quarter, reporting revenues of $2.96 billion, up 21.3% year on year. It was a slower quarter for the company, with a miss of analysts’ billings estimates. It added 89 enterprise customers paying more than $1 million annually to reach a total of 2,109.

Is ServiceNow a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting ServiceNow’s revenue to grow 18.5% year on year to $3.09 billion, slowing from the 24.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $3.84 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. ServiceNow has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 0.8% on average.

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, the segment has faced declining investor sentiment as ServiceNow’s peer group is down 15.2% on average over the last month. ServiceNow is down 10.3% during the same time and is heading into earnings with an average analyst price target of $1,042 (compared to the current share price of $755.99).

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