ServiceNow (NOW) Reports Earnings Tomorrow. What To Expect

Enterprise workflow software maker ServiceNow (NYSE:NOW) will be reporting earnings tomorrow after market close. Here's what investors should know.

Last quarter ServiceNow reported revenues of $1.94 billion, up 20.2% year on year, inline with analyst expectations. It was a solid quarter for the company, with accelerating growth in large customers and an improvement in gross margin. The company added 107 enterprise customers paying more than $1m annually to a total of 1,637.

Is ServiceNow buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting ServiceNow's revenue to grow 21.1% year on year to $2.09 billion, slowing down from the 26.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.05 per share.

The analysts covering the company have had mixed opinions about the business heading into the earnings, with revenue estimates seeing four upward and three downward revisions over the last thirty days. The company missed Wall St's revenue estimates three times over the last two years.

With ServiceNow being the first among its peers to report earnings this season, we don't have anywhere else to look at to get a hint at how this quarter will unravel for software stocks, but investors in the segment have had steady hands going into the earnings, with the stocks up on average 0.36% over the last month. ServiceNow is up 9.38% during the same time, and is heading into the earnings with analyst price target of $536, compared to share price of $471.75.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.