From Nasdaq: 2024-11-20 10:55:00

ServiceNow has expanded its partnership with Microsoft to enhance front-office processes using AI, integrating ServiceNow’s capabilities with Microsoft 365 Copilot for streamlined workflows and self-service options in Teams. Employees can access knowledge base, request services through chat, and get live agent support. NOW’s GenAI portfolio and partner base are driving top-line growth, with shares up 44.6% YTD, outperforming the sector and industry.

ServiceNow raised its subscription revenue guidance for 2024, expecting $10.655-$10.66 billion, up 23% from 2023 on a GAAP basis. Fourth-quarter subscription revenues are projected to be $2.875-$2.88 billion, with a 21.5%-22% year-over-year improvement. NOW expects strong performance obligations growth and a non-GAAP operating margin of 29% in Q4.

ServiceNow’s strong GenAI capabilities and rich partner base are expected to drive subscription revenues and market growth. The company’s innovative Xanadu update offers AI-powered solutions for various industries, expanding its AI portfolio to enterprise functions like Security. NOW plans to integrate Agentic AI to improve productivity and reduce issue resolution time.

ServiceNow’s strong liquidity position with $5.295 billion in cash and a free cash flow of $471 million in Q3 2024, supports growth opportunities like acquisitions and share repurchases. The company’s premium valuation is justified by its strong growth prospects and GenAI capabilities, making it attractive for growth-oriented investors.

ServiceNow’s collaboration with Microsoft, expansion of GenAI capabilities, and strong liquidity position make it a buy opportunity for investors. The stock’s Growth Score of B and Zacks Rank #2 (Buy) add to its attractiveness for potential growth and value. The company’s innovative solutions and partnerships position it well for future success and market growth.



Read more at Nasdaq: Is ServiceNow Stock a Buy Post Expanded Partnership With Microsoft?