Is ServiceNow Stock a Buy After Shares Sink?
ServiceNow's stock plummeted after Q1 results due to deceleration in subscription revenue and RPO growth, despite beating analyst consensus. The stock is now considered cheap at a forward P/S multiple of 5.5 and a forward P/E of 20.
ServiceNow's stock plunged after announcing its Q1 results. Revenue climbed 22% year over year to $3.77 billion, while adjusted EPS rose 20% to $0.97, topping analyst consensus. Subscription revenue jumped 22% to $3.67 billion, and remaining performance obligations (RPO) increased by 23.5% to $27.3 billion. The company expects Q2 subscription revenue to grow 22.5% and raised its full-year subscription revenue guidance to $15.735 billion-$15.775 billion, representing 22%-22.5% growth. At a forward P/S multiple of 5.5 and a forward P/E of 20, the stock is considered cheap.
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