NEW YORK (TheStreet) --The EPS and price target for ServiceNow Inc. (NOW) were increased at UBS (UBS) as the firm said it sees "immense untapped growth opportunity as 79% of the Global 2000 is not yet a customer and the competitive environment is benign."
UBS maintained its "buy" rating and raised its price target to $70 from $69 for the cloud-based service provider.
Shares of ServiceNow are trading lower -7.12% to $49.29 on Thursday morning.
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TheStreet Ratings team rates SERVICENOW INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SERVICENOW INC (NOW) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 144.0% when compared to the same quarter one year ago, falling from -$9.93 million to -$24.23 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, SERVICENOW INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio of 1.05 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, NOW has managed to keep a strong quick ratio of 2.26, which demonstrates the ability to cover short-term cash needs.
- SERVICENOW INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SERVICENOW INC reported poor results of -$0.54 versus -$0.31 in the prior year. This year, the market expects an improvement in earnings (-$0.04 versus -$0.54).
- The gross profit margin for SERVICENOW INC is currently very high, coming in at 70.02%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -19.34% is in-line with the industry average.
- You can view the full analysis from the report here: NOW Ratings Report