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Q2 Earnings Outperformers: ServiceNow (NYSE:NOW) And The Rest Of The Automation Software Stocks


Adam Hejl /
2021/10/20 6:18 am EDT
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Earnings results often give us a good indication what direction will the company will take in the months ahead. With Q2 behind us, and Q3 earnings season just about to start, let’s have a look at ServiceNow (NYSE:NOW) and its peers.

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 solid Q2; on average, revenues beat analyst consensus estimates by 4.33%, while on average next quarter revenue guidance was 3.12% above consensus. On average the share price was down 3.3% the day after the earnings.

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 $1.4 billion, up 31.5% year on year, beating analyst expectations by 3.5%. It was a decent quarter for the company, with a strong top line growth but a decline in gross margin.

“I’m so proud of our team’s performance, significantly exceeding the high end of our guidance across all metrics, which is reflected in our strong full-year guidance raise,” said Bill McDermott, ServiceNow president and CEO.

ServiceNow Total Revenue

ServiceNow scored the highest full year guidance raise of the whole group. The company added 55 enterprise customers paying more than $1m annually to a total of 1,201. The stock is up 16.6% since the results and currently trades at $680.55.

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

Best Q2: 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 $86.2 million, up 38.5% year on year, beating analyst expectations by 3.83%. It was a very strong quarter for the company, with a very optimistic guidance for the next quarter and a full year guidance beating analysts' expectations.

Jamf Total Revenue

The stock is up 41.9% since the results and currently trades at $44.60.

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

Weakest Q2: 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 $82.9 million, up 24.2% year on year, beating analyst expectations by 6.24%. It was a decent quarter for the company, with a solid beat of analyst estimates but a decline in gross margin.

Appian delivered the strongest analyst estimates beat but had the slowest revenue growth in the group. The stock is down 13.5% since the results and currently trades at $97.03.

Read our full analysis of Appian'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 $86.6 million, up 32.5% year on year, beating analyst expectations by 3.25%. It was a decent quarter for the company, with a strong top line growth and a small upgrade to full year guidance.

Everbridge had the weakest performance against analyst estimates among the peers. The company added 142 customers to a total of 5,890. The stock is up 3.84% since the results and currently trades at $150.

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

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 $195.5 million, up 40.2% year on year, beating analyst expectations by 4.84%. It was a very strong quarter for the company, with a solid customer growth.

UiPath delivered the fastest revenue growth but had the weakest full year guidance update among the peers. The company added 600 customers to a total of 9,100. The market likely expected more as the stock is down 17.2% since the results and currently trades at $51.68.

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

The author has no position in any of the stocks mentioned