Jim Cramer on ServiceNow: "This Stock Has Become a Nightmare"

ServiceNow, Inc. (NYSE:NOW) is one of the stocks Jim Cramer shared his thoughts on. Cramer praised the company and CEO, but added the stock has “become a nightmare,” as he commented:

First, let me just say that ServiceNow is a tremendous company with a highly respected CEO… I know dozens of their clients. I’ve never heard anything but praise. However, this stock has become a nightmare, down more than 50% over the last 12 months, including a nearly 10% beating today in response to last night’s quarter. Even though, again, the actual numbers were excellent. So what the heck’s going on here? The earnings are fine. The problem is the M, what people will pay for those earnings. ServiceNow’s multiple is shrinking.

The M is being compressed, and it doesn’t seem to matter what Bill does or says. He can order up a huge buyback as he did last night. He can break records when it comes to how fast his very lucrative business has grown. He can show that ServiceNow’s core business isn’t being cannibalized by its AI component at all. Business is better than ever. But the market just doesn’t believe him about the future, about the forecast…

So the question isn’t whether ServiceNow will keep delivering earnings. I think it will. It doesn’t matter. Last night, when I was interviewing Bill, he was emphatic about the client wins, the incredible growth, the buyback. Yet, out of the corner of my eye… I just saw the stock being hammered mercilessly, and I said, I guess what he says doesn’t matter. It was all going down before he even went on the conference call. The M can be brutal.

ServiceNow, Inc. (NYSE:NOW) provides a cloud platform that supports digital workflows through AI, automation, low-code tools, analytics, and a suite of IT, security, customer service, and employee experience products.

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Disclosure: None. This article is originally published at Insider Monkey.