NOW - Embedded Expectations Analysis - 2021 07 19
ServiceNow, Inc. (NOW:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 138.0x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about cloud migration, the Intellibot acquisition, and digital solutions.Specifically, management may lack confidence in their ability to provide automation technology for the Intellibot acquisition, support the delivery and management of vaccines, and mitigate risk associated with migrating on-premise applications to cloud. Additionally, they may have concerns about the timing of subscription billings, the accuracy of current remaining performance obligations (RPO) as a forward-looking indicator, and the potential of low-code platforms. Furthermore, management may be exaggerating their development competitive advantage, the potential of their platform innovations, and their digital selling expertise. Finally, they may have concerns about implementing employee workflows for Zalando, partnering with global brands, and global digital transformation spending trends.
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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