Latest news with #NowAssistAI
Yahoo
3 days ago
- Business
- Yahoo
5 Insightful Analyst Questions From ServiceNow's Q1 Earnings Call
ServiceNow's first quarter results were well received by the market, reflecting management's focus on broad-based workflow adoption and rapid expansion in artificial intelligence-driven solutions. CEO Bill McDermott credited the quarter's growth to substantial increases in large enterprise deals, particularly within technology, CRM, and public sector workflows. The company highlighted significant acceleration in its Pro Plus and Now Assist AI products, noting that the number of Pro Plus deals more than quadrupled year over year. Management also emphasized strong renewal rates and customer expansion, with CFO Gina Mastantuono noting, 'Our renewal rate remained best in class at 98%, underscoring the consistent value that ServiceNow delivers to our customers.' Is now the time to buy NOW? Find out in our full research report (it's free). Revenue: $3.09 billion vs analyst estimates of $3.08 billion (18.6% year-on-year growth, in line) Adjusted EPS: $4.04 vs analyst estimates of $3.83 (5.4% beat) Adjusted Operating Income: $953 million vs analyst estimates of $928 million (30.9% margin, 2.7% beat) The company provided subscription revenue guidance for the full year of $12.66 billion at the midpoint Operating Margin: 14.6%, up from 12.8% in the same quarter last year Market Capitalization: $208.5 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Keith Weiss (Morgan Stanley) asked whether macro uncertainty or elongated sales cycles factored into guidance. CFO Gina Mastantuono replied that guidance incorporates a healthy degree of conservatism, but 'demand that we're seeing remains strong,' with comprehensive pipeline analysis supporting outlook. Kash Rangan (Goldman Sachs) inquired about the impact of the Moveworks acquisition and any changes to the sales playbook amid customer tariff concerns. President and Chief Product Officer Amit Zavery explained Moveworks will accelerate the roadmap and user experience, while CEO Bill McDermott emphasized continued strong demand despite macro variables. Mark Murphy (JPMorgan) questioned ServiceNow's ambitions in CRM and whether the company intends to be a core system of record. McDermott confirmed broader aspirations, aiming to deliver a fully integrated, AI-powered front office that connects sales and service for improved customer productivity. Alex Zukin (Wolfe Research) asked about the quarterly mix shift in workflows and whether manufacturing and federal results reflected pull-forward demand. Mastantuono noted that all workflows continue to perform well and no material pull-forwards were seen, attributing results to strong execution. Kylie (Citi) asked about the adoption trajectory for Pro Plus and its importance to growth targets. Zavery said adoption is expected to continue accelerating, and Mastantuono reiterated Now Assist and AI as key contributors to ServiceNow's multi-year growth goals. In coming quarters, our analysts will watch (1) the adoption rate and customer expansion of AI-powered products like Pro Plus and AgenTek, (2) integration progress and customer impact from the Moveworks and acquisitions, and (3) continued momentum in public sector and regulated industry segments. Execution on these priorities, along with the rollout of new workflow automation features, will be critical markers of ServiceNow's ability to sustain growth. ServiceNow currently trades at $1,007, up from $814.07 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
23-02-2025
- Business
- Yahoo
3 Growth Stocks That Could Go Even Higher in 2025 and Beyond
Many high-growth stocks rallied over the past year in expectation of lower interest rates, boosting their stock prices and their valuations in the process. But because of those gains, some investors might be wary of chasing those highfliers now, especially as the real potential for new tariffs and trade conflicts threaten to end the current bull market (which started in October 2022). Long-term investors shouldn't be afraid to invest in top tech companies that have plenty of room to grow over the next few decades. I believe these three long-term winners are still worth buying in this frothy market: ServiceNow (NYSE: NOW), Toast (NYSE: TOST), and Affirm (NASDAQ: AFRM). Here's why. ServiceNow's cloud-based digital workflow platform cleans up unstructured work patterns and makes it easier for companies to expand efficiently, cut costs, and provide better support for their hybrid and remote workers. Its Now Assist AI platform further accelerates that process with AI-powered chatbots and automation tools for employees. Its business model is well insulated from the macroeconomic headwinds since many companies use its tools to streamline their operations during economic downturns. Its adjusted revenue rose 23.5% in 2023 and 22.5% in 2024, and analysts expect it to grow at a compound annual growth rate (CAGR) of 19% over the next three years. It's also profitable on a generally accepted accounting principles (GAAP) basis, and analysts expect its earnings per share (EPS) to grow at a CAGR of 28% from 2024 to 2027. ServiceNow expects its long-term growth to be driven by new government contracts and the rising usage of Now Assist's AI tools. During its latest conference call in January, CEO Bill McDermott called his company the "control tower for AI transformation" and said it's clear its "AI platform message is landing, and it's scaling." ServiceNow's stock might not seem cheap at 15 times this year's sales, but it's poised to grow over the next few decades. Its ecosystem is sticky, it's resistant to recessions, and it's well exposed to the booming cloud and AI markets. Toast sells point-of-sale (POS) payment systems, guest-facing and kitchen displays, and cloud-based services for managing payrolls, loyalty plans, online orders, and reservations. Simply put, it's a one-stop shop for digitizing a restaurant. Toast served 48,000 restaurants when it went public in 2021, but that figure had grown to nearly 127,000 restaurants in its latest quarter. It expanded even as the pandemic and inflation disrupted the restaurant industry over the past five years. To keep growing, Toast is expanding its higher-margin subscription services and financial technology solutions segment (which provides its ancillary services) to reduce its dependence on its low-margin payment processing fees. It also streamlined its business with major rounds of layoffs in 2020 and 2024, and it continues to cut its other expenses. Toast's revenue rose 60% in 2022 and 42% in 2023, and analysts expect its revenue to grow at a CAGR of 24% from 2023 to 2026 as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rises at a CAGR of 129%. Its business is gradually maturing, but it could still have plenty of room to grow as it digitizes more brick-and-mortar restaurants. That's a bright outlook for a stock that trades at just 4 times next year's sales. Affirm is a top provider of buy now, pay later (BNPL) services. It splits purchases into smaller installment plans through "microloans," which are attractive options for younger or lower-income consumers who can't get approved for credit cards. It doesn't charge any interest on payments split into four installments, and it doesn't charge any compound interest or hidden fees for any of its payments. It's also an attractive payment option for big merchants, which can often negotiate lower BNPL fees than the 1.5% to 3.5% swipe fees charged by most credit card networks. Affirm's revenue only rose 18% in fiscal 2023 (which ended in June 2023) as it lapped its pandemic-driven growth spurt and faced tougher inflationary headwinds. But in fiscal 2024, its revenue grew 46% as it gained more merchants, issued its Affirm Card (which combines a debit card with BNPL options) to more consumers, and benefited from higher travel and general merchandise sales. By the end of its latest quarter, its loans that were delinquent for over 30 days held steady at just 2.8%. From fiscal 2024 to fiscal 2027, analysts expect Affirm's revenue to grow at a CAGR of 28% as the macro environment stabilizes again. Its adjusted EBITDA is also expected to turn positive in fiscal 2025 and grow at a CAGR of 327% over the following two years. It might not seem cheap at 10 times this year's sales, but it could be a great long-term play on the secular expansion of the nascent BNPL market and the disruption of traditional credit cards. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $361,026!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $46,425!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $562,659!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of February 3, 2025 Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow and Toast. The Motley Fool has a disclosure policy. 3 Growth Stocks That Could Go Even Higher in 2025 and Beyond was originally published by The Motley Fool
