ServiceNow shares drop 7% pre-market on reduced full-year subscription revenue forecast

July 29, 2022

Categories: Market ForecastsTags: $NYSE:NOW, market news, NYSE, stock analysisViews: 23

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ServiceNow ($NYSE:NOW) shares dropped 7% pre-market on Thursday after the company reduced its full-year subscription revenue forecast. This overshadowed an otherwise better-than-expected Q2 show. The software firm generated adjusted earnings per share of $1.62 on revenue of $1.82 billion, with subscription revenues up 29.5% year-over-year to $1.72 billion. As of June 30, 2022, non-GAAP current remaining performance obligations was $6.02 billion. Analysts are divided on how this will affect ServiceNow’s market and earnings in the long term. Some believe that the reduced forecast is a one-time event and that the company will return to strong growth in the second half of the year. Others believe that this is a sign of slowing growth for the company and that its stock is overvalued.

Market Reaction

The stock opened at $431.2 and closed at $436.5.

VI Analysis

The company’s fundamentals reflect its long term potential. The following analysis of SERVICENOW is made simple by the VI app. According to the VI Risk Rating, SERVICENOW is a medium risk investment in terms of financial and business aspects. You can look at what are the business and financial areas presenting potential risks in our website.

Summary

ServiceNow ($NYSE:NOW) is a leading provider of cloud-based services that automate enterprise IT operations. ServiceNow blamed the reduced forecast on a number of factors, including slower-than-expected customer adoption of its new products and delays in signing new customers. The company also said that it is seeing increased competition from other providers of cloud-based services. Despite the reduced forecast, ServiceNow remains a leader in the fast-growing market for cloud-based services. The recent drop in ServiceNow’s stock price presents an attractive buying opportunity for long-term investors. The company is well-positioned to continue growing at a rapid pace as more and more enterprises move to the cloud.