Why Is ServiceNow (NOW) Stock Up 12% Today?
ServiceNow (NYSE:NOW) stock is climbing higher on Thursday after the company released its earnings report for the third quarter of 2022.
The positive news for NOW starts with ServiceNow’s adjusted earnings per share of $1.96. That’s above the $1.85 per share that Wall Street had expected for the quarter. It’s also better than the $1.55 per share reported in Q3 2021.
To go along with that, ServiceNow reported revenue of $1.83 billion. Unfortunately, that missed analysts’ revenue estimate of $1.85 billion, although it was a 21% year-over-year (YOY) increase from $1.51 billion.
Brad Zelnick, an analyst for Deutsche Bank, pointed to ServiceNow’s federal business as the reason for strong Q3 results, per Investor’s Business Daily:
“Management reiterated that they continue to operate in an uncertain market backdrop similar to what they reported at the end of last quarter […] However, execution was clearly solid and likely helped by an all-time record quarter in their U.S. federal business which we believe is less economically sensitive.”
NOW Also Offered Q4 Guidance
The latest earnings report included ServiceNow’s expectations for Q4 2022. For the period, the company foresees subscription revenue ranging between $1.834 billion and $1.839 billion. That would represent 20% to 21% growth compared to Q4 2021.
This news has the stock seeing heavy trading on Thursday. As of this writing, more than 3 million shares have changed hands. That’s nearly double the company’s daily average trading volume of about 1.7 million shares.
NOW stock is up 12.4% as of Thursday afternoon.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.