Insiders have access to real-time information on their companies and often also have a wealth of experience and knowledge to help them evaluate their firms’ prospects. If they are spending millions on company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at ServiceNow Inc (NOW:US). ServiceNow is a digital workflow company. Its applications, which are designed to increase business efficiency, automate, predict, digitize, and optimize business processes and tasks across IT, customer service, security operations, and HR service delivery. The company is listed on the New York Stock Exchange and currently has a market capitalization of $135 billion.
ServiceNow Inc: Insider Buying
Our data shows that on November 8, board member Dennis Woodside purchased 2,861 NOW shares at a price of 694.58 per share, spending just under $2 million on stock. This purchase was for the Gerrity/Woodside Community Property Trust. The trade took Woodside’s total direct and indirect holdings to 7,669 shares.
Mr. Woodside – who joined the ServiceNow board in 2018 – has extensive experience in the technology sector. Previously, he served as COO at DropBox between 2014 and 2018. Before this, he was CEO of Motorola Mobility LLC and President of Americas at Google. This background means he is likely to have a good understanding of ServiceNow’s prospects.
What stands out about this trade from Mr. Woodside is its size. The fact that the insider has spent nearly $2 million on stock suggests that he is very confident the stock is going higher. It’s worth noting that insider purchases at ServiceNow are quite rare. The trade from Mr. Woodside represents the first purchase from an insider since late 2019 and the fourth since the company went public in 2012.
Q3 Beat and Raise
ServiceNow’s recent Q3 results showed that the company has a lot of momentum right now.
For the quarter, subscription revenues amounted to $1,427 million, representing 31% year‑over‑year growth, while current remaining performance obligations (CRPO) – contract revenue that will be recognized as revenue in the next 12 months – was $5.0 billion, representing 32% year‑over‑year growth. Adjusted earnings per share came in at $1.55, well above the consensus forecast of $1.38.
As a result of these strong results, the company raised its full-year guidance. It now expects full-year revenue of $5,565 million to $5,570 million, which would represent growth of 30% year on year. Previous guidance was $5,530 million to $5,540 million.
“Q3 was another fantastic quarter with continued outperformance across all of our growth and profitability guidance metrics. The consistency of our results exemplifies the strength of our product portfolio and the team’s focus on building deep customer relationships. We are well positioned as the workflow standard on our journey to becoming a $15+ billion revenue company,” commented CFO Gina Mastantuono.
In light of these strong results, we see the insider buying here as a bullish indicator.