How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in ServiceNow (NOW) ten years ago? It may not have been easy to hold on to NOW for all that time, but if you did, how much would your investment be worth today?
ServiceNow's Business In-Depth
With that in mind, let's take a look at ServiceNow's main business drivers.
Santa Clara, CA-based ServiceNow Inc. provides cloud computing services that automate digital workflows to accelerate enterprise IT operations. The company’s Now Platform enables enterprises to enhance productivity by streamlining system processes.
By utilizing ServiceNow’s product portfolio, customers can design any workflow application to reduce the manual time taken by complex processes, and consequently optimize total cost of ownership or TCO.
The company’s solutions address the needs of many departments within an enterprise, including IT, human resources (HR), facilities, field service, marketing, customer service, security, legal and finance.
Now platform is the foundation of the company’s cloud-based services.
The company has three product suites for IT management and operations. These are IT Service Management (ITSM), IT Operations Management (ITOM) and IT Business Management (ITBM) solutions.
Non-IT products include Customer Service, HR and Security Operations.
ServiceNow’s end-markets are quite varied, which includes financial services, consumer products, IT services, health care, government, education, and technology.
In 2022, total revenues came in at $7.245 billion. ServiceNow derives revenues from two sources – subscriptions (95.1% of 2022 revenues) and professional services and other (4.9% of 2022 revenues).
North America, Europe, the Middle East and Africa (EMEA), and Asia Pacific & Other contributed approximately 65.2%, 24.5% and 10.3% of revenues, respectively in 2022.
The company operates data centers in Australia, Brazil, Canada, Hong Kong, Netherlands, Singapore, Switzerland, UK and the U.S.
ServiceNow has approximately 7,700 enterprise customers.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For ServiceNow, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in May 2013 would be worth $12,631.10, or a 1,163.11% gain, as of May 19, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 151.76% and the price of gold went up 38.74% over the same time frame.
Going forward, analysts are expecting more upside for NOW.
ServiceNow reported impressive first-quarter 2023 results. Both earnings and revenues increased on a year-over-year basis. ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1,682 total customers with more than $1 million in annual contract value at the end of the first quarter. NOW’s expanding global presence, solid partner base and strategic buyouts are positives. New solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — is helping it win new customers. Strategic alliances with the likes of Microsoft remain tailwinds. Its shares have outperformed the industry year to date. Nevertheless, ServiceNow is suffering from high inflation, unfavorable forex, stiff competition and challenging macro-economic environment.
Shares have gained 9.08% over the past four weeks and there have been 13 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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