Cloud Companies to Buy: ServiceNow (NOW)
ServiceNow (NOW) operates a platform that automates and manages information technology processes, such as the help desk. By being cloud-based, the technology allows customers to build innovative apps, which has resulted in strong customer loyalty.
As with many other hot cloud companies, NOW stock has been a roller coaster lately. But this isn’t an issue for the company’s CEO, Frank Slootman. I met with Slootman recently, and he told me that ServiceNow could be instantly profitable if he dialed down growth. He said that would be a mistake, though, because the market opportunity is massive. His competition is mostly made up of legacy operators like BMC (BMC) and Hewlett-Packard (HPQ).
In the latest quarter, ServiceNow saw a 62% spike in revenues to$139 million. There were also nine new transactions with annual contract values in excess of $1 million and one deal was more than $10 million. ServiceNow is also a big generator of cash flows, which came to $24.2 million in Q1.