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ServiceNow- Operating in a "Red Hot" Sector

ServiceNow (NOW) is a California-based cloud computing company; the software-as-a-service (SaaS) provider offers IT management and support to large corporations, including help desk functionality, explains Todd Shaver, growth stock expert, tech specialist and editor of Bull Market Report.

The company manages technical issues that arise, and charges on a per-seat basis (based on the number of employees at the client company).

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The beauty of the company’s business model is that it can sell to a range of industries. Everyone from tech to financials to healthcare to the auto industry needs IT services, and ServiceNow is tailoring its suite of products to meet all of those disparate markets.

ServiceNow is a dominant performer in a hot industry that is growing in popularity. As more companies across the globe adopt cloud-based operations, ServiceNow’s offerings become crucial.

The company helps its clients cut down the time spent on IT incidents by an average of 50%, and can consolidate apps and digital tools to save millions for its client base. No wonder the company has a 99% retention rate.

ServiceNow has grown its annualized revenue 36% over the last three years. 3Q19 saw revenue increase 34% YoY to $885 million, and EPS of $0.99 beat market consensus by $0.11.

With the stock rocketing past $300 earlier this year, only to come back down to earth a bit, now is the time to pounce. 3Q19 was a strong one, and the company is fundamentally in solid shape.

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We’re confident the CEO transition will run smoothly, and ServiceNow will continue to acquire more high-value clients, grow revenue, capture market share and purchase niche players that augment its own service capabilities. We like ServiceNow as a strong SaaS player in the red-hot cloud computing industry.

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