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Automation Software Stocks Q3 In Review: ServiceNow (NYSE:NOW) Vs Peers


Kayode Omotosho /
2022/01/19 6:19 am EST
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The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the automation software stocks fared in Q3, starting with ServiceNow (NYSE:NOW).

The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.

The 5 automation software stocks we track reported a decent Q3; on average, revenues beat analyst consensus estimates by 2.78%, while on average next quarter revenue guidance was 1.16% above consensus. Technology stocks have been hit hard on fears of higher interest rates and automation software stocks have not been spared, with share price down 36.6% since earnings, on average.

ServiceNow (NYSE:NOW)

Founded by Fred Luddy who wrote the code for the initial prototype on a single flight from San Francisco to London, ServiceNow (NYSE:NOW) offers software as a service platform that helps companies become more efficient by allowing them to automate workflows across IT, HR and Customer Service.

ServiceNow reported revenues of $1.51 billion, up 31.2% year on year, beating analyst expectations by 2.25%. It was a solid quarter for the company, with a strong top line growth and accelerating growth in large customers.

“We reported another significant beat and raise quarter in Q3,” said ServiceNow President and CEO Bill McDermott.

ServiceNow Total Revenue

ServiceNow added 65 new enterprise customers paying more than $1m annually, to a total of 1,266. The stock is down 21.7% since the results and currently trades at $520.60.

We think ServiceNow is a good business, but is it a buy today? Read our full report here, it's free.

Best Q3: UiPath (NYSE:PATH)

Started in 2005 in Romania as a tech outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computer tasks.

UiPath reported revenues of $220.8 million, up 49.9% year on year, beating analyst expectations by 5.53%. It was a strong quarter for the company, with an exceptional revenue growth and guidance roughly in line with what analysts were expecting.

UiPath Total Revenue

UiPath delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 25.3% since the results and currently trades at $35.61.

Is now the time to buy UiPath? Access our full analysis of the earnings results here, it's free.

Jamf (NASDAQ:JAMF)

Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf (NASDAQ:JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.

Jamf reported revenues of $95.6 million, up 35.8% year on year, beating analyst expectations by 2.01%. It was a decent quarter for the company, with an exceptional revenue growth but a decline in gross margin.

The stock is down 19.2% since the results and currently trades at $33.33.

Read our full analysis of Jamf's results here.

Everbridge (NASDAQ:EVBG)

Founded as a reaction to the catastrophic events of 9/11, Everbridge (NASDAQ:EVBG) supplies software that helps governments and businesses keep people and infrastructure safe in emergencies.

Everbridge reported revenues of $96.7 million, up 35.7% year on year, beating analyst expectations by 2.61%. It was a decent quarter for the company, with an exceptional revenue growth but decelerating customer growth.

Everbridge pulled off the highest full year guidance raise among the peers. The company added 120 customers to a total of 6,010. The stock is down 66.7% since the results and currently trades at $52.82.

Read our full, actionable report on Everbridge here, it's free.

Appian (NASDAQ:APPN)

Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.

Appian reported revenues of $92.4 million, up 19.5% year on year, beating analyst expectations by 1.49%. It was a decent quarter for the company, with a significant improvement in gross margin but a decline in net revenue retention rate.

Appian had the smallest earnings surprise, slowest revenue growth, and weakest full year guidance update among the peers. The stock is down 50% since the results and currently trades at $51.55.

Read our full, actionable report on Appian here, it's free.

The author has no position in any of the stocks mentioned