Why ServiceNow (NOW) is a Top Growth Stock for the Long-Term

ServiceNow (NOW) is highlighted as a potential growth stock, currently holding a Zacks Rank of #3 (Hold) but possessing a Growth Style Score of A and a VGM Score of B. The company's Now Platform is utilized by a significant portion of Fortune 500 and Global 2000 enterprises, and analysts project an 18.6% year-over-year earnings growth for the current fiscal year, with the fiscal 2025 Zacks Consensus Estimate increasing by $0.25 to $16.51 per share after 12 upward revisions in the last 60 days.

Analysis

ServiceNow (NOW), despite its current Zacks Rank of #3 (Hold), presents compelling growth characteristics according to the provided analysis. The company's cloud-based Now Platform has achieved significant market penetration, utilized by over 85% of Fortune 500 companies and nearly 60% of Global 2000 enterprises. This strong market adoption supports a robust financial outlook, highlighted by a Zacks Growth Style Score of 'A' and a VGM Score of 'B'. Projections indicate an 18.6% year-over-year earnings growth for the current fiscal year. Reinforcing this positive outlook, 12 analysts have revised their fiscal 2025 earnings estimates upward in the last 60 days, increasing the Zacks Consensus Estimate by $0.25 to $16.51 per share. Furthermore, ServiceNow has a track record of outperforming expectations, evidenced by an average earnings surprise of 6.6%. The overall sentiment surrounding these developments is strongly positive, suggesting that while the broader Zacks Rank is neutral, specific growth metrics and analyst activity are favorable.

Key Decisions for Investors

• Growth-focused investors should consider ServiceNow (NOW) for their watchlist, given its 'A' Growth Style Score, projected 18.6% YoY earnings growth, and positive FY2025 analyst estimate revisions, which suggest upside potential even with a #3 (Hold) Zacks Rank.
• Investors should monitor ServiceNow for any potential upgrade in its Zacks Rank, as an improvement to #1 (Strong Buy) or #2 (Buy) would further validate the strong growth signals currently indicated by its Style Scores and recent analyst actions.
• The consistent average earnings surprise of 6.6% warrants attention, as it suggests a pattern of exceeding market expectations which could positively influence stock performance, particularly around future earnings announcements.