ServiceNow Earnings: Continuing to Defy Gravity With Upside and Strength to Spare

ServiceNow exceeded our expectations for both revenue and profitability for its first quarter, provided solid guidance and raised its full-year outlook approximately in line with outperformance in the quarter. Robust demand coupled with continued tightly focused operations drove outperformance. We are impressed with the company’s performance overall and view guidance as prudent, and are maintaining our fair value estimate of $600 per share for wide-moat ServiceNow. We continue to favor the stock as one of our top picks for both its resilient near-term performance and its long-term organic-driven growth—this is as it leverages its strength in workflow automation to bring its existing customers more deeply into IT, and more broadly with human resources and customer service-specific products, as well as its continued push into industry segment-specialized versions and operating efficiency.