ServiceNow Beats Q4 Estimates, Guides Above Forecasts and Launches $2B Buyback
ServiceNow’s shares have plunged 45.9% over the past year and 25% year-to-date despite a fourth-quarter beat with $3.5 billion in revenue and $0.92 adjusted EPS versus $3.57 billion and $0.88 estimates. The company also guided Q1 revenue of $3.65–3.66 billion above forecasts and launched a $2 billion tranche of its $5 billion buyback.
1. Cramer Flags Oversold Shares
Jim Cramer argued that ServiceNow’s 45.9% fall over the last 12 months and 25% drop year-to-date are overdone, citing strong fundamentals and recent acceleration in shareholder returns.
2. Q4 Results Top Analyst Projections
In Q4, ServiceNow posted $3.5 billion in revenue and $0.92 in adjusted EPS, topping consensus of $3.57 billion and $0.88. Management forecast Q1 revenue of $3.65–3.66 billion versus estimates of $3.57 billion.
3. Buyback and Valuation Context
ServiceNow initiated a $2 billion tranche of a $5 billion share repurchase program and CEO Bill McDermott extended his contract for five years. The stock trades at roughly 27 times forward earnings, below many software peers.