Investors in ServiceNow, Inc. (NYSE:NOW) had a good week, as its shares rose 5.2% to close at US$721 following the release of its quarterly results. Revenues were US$2.6b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.67, an impressive 26% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for ServiceNow from 36 analysts is for revenues of US$10.9b in 2024. If met, it would imply a solid 15% increase on its revenue over the past 12 months. Statutory earnings per share are expected to crater 35% to US$6.08 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$10.9b and earnings per share (EPS) of US$6.04 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$859, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ServiceNow, with the most bullish analyst valuing it at US$950 and the most bearish at US$734 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting ServiceNow is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 21% growth on an annualised basis. That is in line with its 23% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that ServiceNow is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$859, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ServiceNow going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for ServiceNow you should know about.

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