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ServiceNow rises 3.8%; Pac Crest pounds table after selloff, analyst day

Apr. 21, 2015 4:06 PM ETServiceNow, Inc. (NOW) StockNOWBy: Eric Jhonsa, SA News Editor
  • "ServiceNow (NYSE:NOW) continues to execute on its massive opportunity, and increasing traction within the enterprise creates an opportunity to be over $4 billion in revenue in 2020," writes Pac Crest following the cloud IT service management (ITSM) software firm's Monday analyst day. "We believe the recent pullback in shares creates an opportunity to buy a disruptive software company with quickly ramping free cash flow."
  • Pac Crest note ServiceNow "continues to add over 20 new Global 2000 customers per quarter while also increasing the average annual contract value to $746,000 currently from $555,000 a year ago," and that revenue is expected to reach a $1B/year run rate by year's end.
  • Like other bulls, it sees ServiceNow's expansion into non-ITSM markets such as HR service management, field service management, and IT financial management software acting as a catalyst, and is also upbeat about its recently-launched app store for 3rd-party apps that integrate with ServiceNow's offerings (similar to Salesforce's Force.com).
  • ServiceNow rallied to $77.50 today, recovering a portion of the big Friday losses seen after the company offered light Q2 guidance to go with a smaller sales/EPS beat than seen in recent quarters.
  • Analyst day slides (.pdf)

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