To The Moon

$ServiceNow(NOW)$ is scheduled to announce its third quarter earnings on 23 October (Wednesday) after markets close.

NOW is expected to report a 19.9% increase in revenue to $2.743 billion from $2.29 billion a year ago,

Estimate for ServiceNow Inc is for earnings of $3.45 per share.

Investors await eagerly to see how much the company has benefited in the quarter from its expansion, as enterprises continue to adopt its workflow.

ServiceNow In Leader Quadrant Gartner

ServiceNow, the AI platform for business transformation, has been named a Leader in the 2024 Gartner Magic Quadrant for Enterprise Low-Code Application Platforms. This marks the fifth consecutive year where ServiceNow has been positioned as a Leader.

This recognition was based on an evaluation of ServiceNow’s Completeness of Vision and Ability to Execute. ServiceNow attributes this recognition to its commitment to innovation and consistent delivery of customer demand for GenAI and workflow automation features.

Gartner defines enterprise low-code application platforms (LCAPs) as "platforms for accelerated development and maintenance of applications, using model-driven tools for the entire application’s technology stack, generative AI, and prebuilt component catalogs." According to Gartner, "By 2028, 60% of software development organizations will use enterprise LCAPs as their main internal developer platform, up from 10% in 2024."

ServiceNow (NOW) Price Target

While there have been sideway trading for NOW over the past week, however, there has been positive investor sentiment in the segment, with share prices up 4.8% on average over the last month.

ServiceNow’s stock price was unchanged during the same time and is heading into earnings based on 29 Wall Street analysts offering 12 month price targets for ServiceNow in the last 3 months. The average price target is $944.00 with a high forecast of $1,100.00 and a low forecast of $716.00. The average price target represents a 2.84% change from the last price of $917.95.

I would be expecting ServiceNow to benefit from the AI development shifting from hardware to software providers.

ServiceNow (NOW) Post Earnings Movement and IV Skew

The options market overestimated NOW stocks earnings move 83% of the time in the last 12 quarters.The predicted move after earnings announcement was ±6.8% on average vs an average of the actual earnings moves of 5.4% (in absolute terms).

The implied volatility skew shows the market's bias for pricing in volatility risk to the option premium of downside puts and upside calls.

The implied volatility for downside puts is decreasing relative to upside calls, this suggests the market is pricing in a larger positivity to a upside move.

The current skew indicator show that it is slightly bullish.

Technical Analysis - MACD and Multi timeframe (MTF)

NOW is trading above the short-term and long-term MA, though it is trading sideway with a slight decline, but MTF is giving a strong uptrend.

I believe the strong investor sentiment and if NOW can deliver on what they have set out in their expansions, we should be able to see a nice upside movement.

Summary

I am expecting some positive earnings from ServiceNow as they should be benefitting from the enterprise spending on AI software. And the outlook and guidance for their expansion plan should come in positive.

With these two factors, we can expect an upside movement in NOW after their earnings result, I will be monitoring the price action for NOW to see if I can take a position before to take a swing trade.

Appreciate if you could share your thoughts in the comment section whether you think NOW could provide an earning surprise and give a positive outlook and guidance on its expansion plan.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.