These stocks have risen spectacularly over the last 30 months and have high betas, implying higher volatility compared to the broader indexes.
While the sell-off resulted in significant price falls, these stocks made strong comebacks in the second half of November.
Shares of ServiceNow fell from $181.04 at the start of November to $156.80 on November 19. The stock has since recovered and risen 20% to close at $188.09. The stock is currently trading 8.8% below its 52-week high of $206.30.
ServiceNow stock has risen 44% in 2018. The stock has risen 118% in the last three years and 275% in the last five years.
Revenue and earnings expansion
Analysts expect ServiceNow’s sales to rise 35% YoY (year-over-year) to $2.61 billion in 2018, 29% YoY to $3.37 billion in 2019, and 27% YoY to $4.28 billion in 2020. The company’s EPS are also expected to rise 98.3% to $2.36 in 2018, 32.6% to $3.13 in 2019, and at a compound annual growth rate of 45% over the next five years.
ServiceNow is expected to be profitable in terms of generally accepted accounting principles by the end of 2019 with a net margin of 0.24%. Its net margin is expected to expand to 3.4% by 2020.
Of the 34 analysts covering ServiceNow, 30 have given it “buys,” four have given it “holds,” and none have given it “sells.” The average 12-month stock price target for ServiceNow is $210.76, indicating a potential upside of 12%.