ServiceNow’s Revenue Expected to Grow Significantly



Revenue growth of 34.6% expected in 2018

In the previous part of this series, we saw that analysts expect ServiceNow’s (NOW) revenue to rise 32.3% year-over-year in the third quarter of 2018. Its revenue is then expected to rise 32.1% to $721.68 million in the fourth quarter.

In the chart below, you can see how ServiceNow has grown its revenue over the years. It has increased its sales from $425 million in 2013 to $1.93 billion in 2017. That’s a 4.5x increase in five fiscal years.

Its robust revenue growth has multiplied investor wealth significantly. ServiceNow’s shares have risen almost eightfold from $25.47 in July 2012 to its current price of $192.72. Since February 2016, the stock has risen ~300%.

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Sales growth expected to continue for ServiceNow

Analysts expect ServiceNow’s sales to rise 29% to $3.35 billion in fiscal 2019 and 27.5% to $4.28 billion in 2020. The growth in revenue is expected to drive EPS higher.

We’ve seen that analysts expect EPS to rise 58% in the third quarter of 2018. It’s expected to grow 97% in the fourth quarter and 95.8% in 2018. Analysts have estimated EPS at $3.15 in 2019, a year-over-year growth of 35.2%.

Earnings for ServiceNow is expected to rise at a CAGR (compound annual growth rate) of 52% over the next five years compared to its historical five-year growth of an impressive 140%.


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