NOW - Embedded Expectations Analysis - 2020 02 03
ServiceNow, Inc. (NOW:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 59.7x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about global expansion, M&A opportunities, and subscriptions growth.Specifically, management may lack confidence in their ability to expand globally, sustain growth in the number of customers they serve, and maintain their deal closing rates. Moreover, they may be exaggerating the strength of their HR business and their ability to drive productivity and better user experience across industries. Furthermore, they may be concerned about the cost of sales of their initiatives, and they may lack confidence their ability to find and integrate tuck-in M&A opportunities. Finally, they may be overstating their ability to sustain subscription revenue and billings growth and integrate their solutions with other cloud platforms.
ServiceNow provides enterprise cloud computing services that define, structure, manage and automate digital workflows for global enterprises. The company markets its services to enterprises in a variety of industries, including consumer products, education, financial services, government, health care, information technology (IT) services and technology. The company sells its subscription services through direct sales and, to a lesser extent, through indirect channel sales. The company also provides a portfolio of personnel and other services, both directly and through its network of partners. The company's products include IT service management, IT operations management, IT business management, and security operations.
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