ServiceNow (NYSE:NOW) Shares Gap Down After Earnings Miss

Shares of ServiceNow, Inc. (NYSE:NOW) gapped down prior to trading on Thursday following a dissappointing earnings announcement. The stock had previously closed at $1,143.63, but opened at $1,027.12. ServiceNow shares last traded at $1,003.73, with a volume of 1,028,040 shares.

The information technology services provider reported $1.93 EPS for the quarter, missing analysts’ consensus estimates of $3.67 by ($1.74). ServiceNow had a net margin of 12.77% and a return on equity of 16.03%.

ServiceNow declared that its board has initiated a share repurchase program on Wednesday, January 29th that allows the company to buyback $3.00 billion in outstanding shares. This buyback authorization allows the information technology services provider to repurchase up to 1.3% of its stock through open market purchases. Stock buyback programs are generally a sign that the company’s board believes its shares are undervalued.

Wall Street Analyst Weigh In

NOW has been the subject of several research analyst reports. Morgan Stanley lowered shares of ServiceNow from an “overweight” rating to an “equal weight” rating and lifted their price objective for the company from $900.00 to $960.00 in a research note on Monday, October 21st. UBS Group lifted their price target on shares of ServiceNow from $900.00 to $1,055.00 and gave the company a “buy” rating in a research note on Tuesday, October 8th. Evercore ISI increased their price objective on shares of ServiceNow from $950.00 to $1,000.00 and gave the stock an “outperform” rating in a research report on Thursday, October 24th. Guggenheim reaffirmed a “sell” rating and issued a $716.00 target price on shares of ServiceNow in a research report on Wednesday, January 22nd. Finally, Canaccord Genuity Group increased their price target on ServiceNow from $1,200.00 to $1,275.00 and gave the stock a “buy” rating in a report on Thursday. One investment analyst has rated the stock with a sell rating, three have issued a hold rating, twenty-five have issued a buy rating and two have given a strong buy rating to the company’s stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $1,129.93.

Insider Buying and Selling

In related news, insider Nicholas Tzitzon sold 313 shares of ServiceNow stock in a transaction that occurred on Monday, November 25th. The shares were sold at an average price of $1,064.60, for a total value of $333,219.80. Following the sale, the insider now owns 3,649 shares of the company’s stock, valued at approximately $3,884,725.40. The trade was a 7.90 % decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Director Anita M. Sands sold 2,229 shares of the stock in a transaction on Monday, November 25th. The shares were sold at an average price of $1,064.60, for a total value of $2,372,993.40. Following the transaction, the director now directly owns 11,000 shares of the company’s stock, valued at approximately $11,710,600. This trade represents a 16.85 % decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 20,731 shares of company stock worth $21,016,751. 0.25% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the company. State Street Corp boosted its position in ServiceNow by 2.6% during the third quarter. State Street Corp now owns 9,077,547 shares of the information technology services provider’s stock worth $8,118,867,000 after purchasing an additional 226,023 shares during the period. FMR LLC boosted its holdings in ServiceNow by 9.9% in the 3rd quarter. FMR LLC now owns 5,606,394 shares of the information technology services provider’s stock worth $5,014,302,000 after buying an additional 502,845 shares during the period. World Investment Advisors LLC grew its stake in ServiceNow by 499,668.1% in the 3rd quarter. World Investment Advisors LLC now owns 4,772,785 shares of the information technology services provider’s stock valued at $4,268,731,000 after buying an additional 4,771,830 shares in the last quarter. Geode Capital Management LLC lifted its position in shares of ServiceNow by 1.9% during the third quarter. Geode Capital Management LLC now owns 4,211,901 shares of the information technology services provider’s stock worth $3,753,828,000 after acquiring an additional 78,378 shares in the last quarter. Finally, Wellington Management Group LLP boosted its holdings in shares of ServiceNow by 24.1% in the third quarter. Wellington Management Group LLP now owns 3,169,531 shares of the information technology services provider’s stock worth $2,834,797,000 after acquiring an additional 615,797 shares during the period. Institutional investors own 87.18% of the company’s stock.

ServiceNow Stock Performance

The company has a 50-day moving average price of $1,085.21 and a two-hundred day moving average price of $952.30. The company has a market capitalization of $208.40 billion, a PE ratio of 157.34, a PEG ratio of 5.11 and a beta of 0.99. The company has a quick ratio of 1.13, a current ratio of 1.13 and a debt-to-equity ratio of 0.16.

About ServiceNow

ServiceNow, Inc provides end to-end intelligent workflow automation platform solutions for digital businesses in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company operates the Now platform for end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, process mining, performance analytics, and collaboration and development tools.