Alps Advisors Lifts ServiceNow Position by 13.9%

Alps Advisors Inc. increased its holdings in ServiceNow Inc (NYSE:NOW) by 13.9% during the second quarter of 2019, according to the firm’s most recent Form 13F filing with the U.S. Securities and Exchange Commission (SEC). Following the purchase of an additional 312 shares during the quarter, Alps Advisors held a total of 2,554 shares of the enterprise IT platform provider, valued at approximately $701,000 at the time of the filing.

Other Institutional Investors Also Expand Positions

Alps Advisors was not alone in growing its ServiceNow stake. Several other institutional investors made incremental additions to their NOW holdings across Q1 and Q2 2019:

• Cornerstone Advisors Inc. grew its holdings by 3.6% in Q2, adding 42 shares for a total of 1,212 shares valued at $333,000.
• Cigna Investments Inc. (New) increased its position by 2.0% in Q1, acquiring 53 additional shares for a total of 2,652 shares valued at $654,000.
• BBVA USA Bancshares Inc. raised its stake by 1.6% in Q2, adding 53 shares for a total of 3,286 shares valued at $902,000.
• Sandy Spring Bank nearly doubled its position with a 118.0% increase in Q1, buying 59 additional shares for a total of 109 shares valued at $27,000.
• Allred Capital Management LLC grew its holdings by 3.5% in Q2, adding 63 shares for a total of 1,888 shares valued at $543,000.

In aggregate, institutional investors held approximately 92.80% of ServiceNow’s outstanding shares as of the filing dates referenced above.

Insider Trading Activity

ServiceNow insiders also engaged in notable selling activity during this period:

• David Schneider (insider) sold 3,559 shares on August 28, 2019 at an average price of $261.77 per share, totaling $931,639.43. Following the sale, Schneider retained approximately 42,362 shares valued at roughly $11.09 million.
• Fay Sien Goon (insider) sold 408 shares on August 19, 2019 at an average price of $258.36 per share, totaling $105,410.88. Goon retained approximately 41,777 shares valued at roughly $10.79 million after the transaction.

In total, insiders sold 117,767 shares valued at approximately $32.08 million during the most recent quarter reported. Corporate insiders collectively owned around 1.00% of the company’s stock.

Analyst Ratings and Price Targets

Wall Street analysts remained broadly bullish on ServiceNow heading into the autumn of 2019. A wave of rating updates followed the company’s Q2 2019 earnings release on July 24, 2019:

• BTIG Research reiterated a “Buy” rating with a $320.00 price target (July 25, 2019).
• Jefferies Financial Group raised its target from $285.00 to $330.00, maintaining a “Buy” rating (July 25, 2019).
• Raymond James lifted its target from $340.00 to $342.00 with a “Strong Buy” rating (July 25, 2019).
• Credit Suisse Group raised its target from $280.00 to $300.00 with an “Outperform” rating (July 25, 2019).
• UBS Group set a new target of $332.00, reiterating a “Buy” rating (July 25, 2019).

Across all covering analysts at the time of publication, four had assigned a Hold rating, twenty-six a Buy, and two a Strong Buy, producing a consensus rating of “Buy” and an average price target of $292.34.

Stock Performance and Key Metrics

On the Friday prior to publication, NYSE:NOW closed at $263.50, down $6.12 for the session, on trading volume of approximately 1.29 million shares against a 30-day average volume of around 1.43 million shares. Selected financial metrics as of that date included:

• Market capitalization: approximately $50.55 billion
• P/E ratio: 1,317.50 (reflecting near-zero GAAP earnings)
• PEG ratio: 22.66
• Beta: 1.34
• Quick ratio / Current ratio: 1.10
• Debt-to-equity ratio: 0.54
• 50-day moving average: $269.27
• 200-day moving average: $262.62
• 52-week low / high: $147.63 / $303.17

Q2 2019 Earnings Summary

ServiceNow reported its Q2 2019 financial results on July 24, 2019. Highlights included:

• EPS: ($0.01) on a GAAP basis, beating the consensus estimate of ($0.03) by $0.02.
• Revenue: $833.90 million, slightly ahead of the consensus estimate of $831.50 million.
• Year-over-year revenue growth: 32.1%
• Return on equity: 4.29%
• Net margin: 0.09%

For context, ServiceNow reported $0.49 EPS in the same quarter of the prior year. Analysts projected the company would post approximately $0.43 EPS for the full fiscal year at the time of this writing.

About ServiceNow

ServiceNow, Inc. is an enterprise cloud computing company that provides a platform for digitizing and automating workflows across IT, customer service, human resources, security operations, and integrated risk management. Its flagship Now Platform enables organizations to define, structure, manage, and automate services at scale. ServiceNow is headquartered in Santa Clara, California, and trades on the New York Stock Exchange under the ticker symbol NOW.

This article is based on publicly available SEC filings and analyst reports as reported in September 2019. It is provided for historical and informational purposes only and does not constitute investment advice.