ServiceNow Inc (NOW) Shares Fall Despite Strong Q4 Earnings – Investors Frightened by 2016 Outlook


Shares of ServiceNow Inc (NYSE:NOW) are down big today despite the fact that the company posted stronger than expected fourth quarter revenue numbers. Revenue came in at an astounding $1 billion, which is an increase of 47 percent year-over-year. Non-GAAP earnings came in at 19 cents per share compared to Wall Street’s expectations of just $0.08.

While investors undoubtedly were pleased with these numbers, it was ServiceNow Inc (NYSE:NOW)’s 2016 outlook which is causing some to be bearish of the stock today. The revenue outlook for 2016 came in at between $1.34 billion and $1.37 billion which is on the low end of Wall Street’s expected $1.37 billion estimate. With this said, however, the company does expect that the first quarter of 2016 will see revenues between $298 and $303 million which is higher than the Street’s estimates of just $297.8 million.

The stock is down 22.55% or $17.01 following the news, hitting $58.42 per share. About 6.55 million shares traded hands or 322.58% up from the average. NOW has declined 6.66% since June 23, 2015 and is downtrending. It has outperformed the S&P500 by 4.36%.

From a total of 10 analysts covering ServiceNow Inc (NYSE:NOW) stock, 6 rate it a “Buy”, 0 a “Sell”, and 4 a “Hold”. This means that 60% of the ratings are positive. The highest target price is $100 while the lowest target price is $75. The mean of all analyst targets is $91.43 which is 56.50% above today’s ($58.42) stock price. ServiceNow Inc was the topic of 13 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Mizuho maintained shares on January 22 with a “Buy” rating. BTIG Research initiated shares with a”Buy” rating and a $85 target share price in their report from a September 10. KeyBanc Capital Markets initiated NOW stock in a recent report from December 18 with a “Sector Weight” rating. Finally, UBS maintained the stock with a “Buy” rating in a report they issued on a December 2.

The institutional sentiment decreased to 1.08 in Q2 2015. It’s down 0.10, from 1.18 in 2015Q2. The ratio dived, as 41 funds sold all their ServiceNow Inc shares they owned while 102 reduced their positions. 38 funds bought stakes while 117 increased their total positions. Institutions now own 137.66 million shares which is 1.25% less than the previous share count of 139.40 million in 2015Q2.

Criterion Capital Management Llc holds 6.62% of its total portfolio in ServiceNow Inc, equating to 2.80 million shares. Avalon Global Asset Management Llc owns 96,000 shares representing 4.81% of their total US portfolio. Moreover, Magee Thomson Investment Partners Llc has 4.14% of their total portfolio invested in the company, equating to 193,500 shares. The New York-based Bennett Lawrence Management L L C Ny has a total of 3.58% of their portfolio invested in the stock. Afton Capital Management Llc, a North Carolina-based fund reported 15,000 shares owned.

Since March 4, 2015, the stock had 0 insider buys, and 26 selling transactions for a total of $138.89 million in net activity. Scarpelli Michael sold 40,000 shares worth $3.00 million. Luddy Frederic B sold 203,600 shares worth $14.98 million. Schneider David sold 10,000 shares worth $746,253. Slootman Frank sold 125,000 shares worth $8.68 million. The insider Mcgee Daniel sold 25,000 shares worth $1.75 million.

ServiceNow, Inc. is a provider of cloud solutions that define, structure, manage and automate services across the global enterprise. The company has a market cap of $11.87 billion. The Firm provides cloud service management solutions that address the needs of a range of departments within an organization, including IT, human resources , facilities, field service, marketing, legal and finance. It currently has negative earnings. It also provides business management and IT activities management solutions that facilitate the delivery of services across the enterprise.