ServiceNow's Quiet Rise

ServiceNow Stock Lags the Market on Monday

Investors in cloud-based software company ServiceNow (NYSE: NOW) were left feeling underwhelmed on Monday as the company's stock price failed to keep pace with the broader market's gains.

The company's shares closed down 1.4% to $444.14, a decline that was more pronounced than the S&P 500's 0.2% rise. The dip came despite a generally positive quarterly earnings report from ServiceNow, which saw its revenue and profitability both exceed expectations.

ServiceNow's Q1 2023 earnings report was highlighted by a 24% year-over-year increase in revenue to $1.3 billion, which was above the consensus estimate of $1.2 billion. The company also saw its non-GAAP earnings per share (EPS) rise 21% year-over-year to $1.44, which was also above the expected $1.37.

However, despite the strong financial performance, investors seemed to focus on some weaker-than-expected guidance from the company. ServiceNow forecast its Q2 2023 revenue to be between $1.35 billion and $1.38 billion, which was below the consensus estimate of $1.42 billion.

The guidance concern, combined with some general market jitters ahead of the Federal Reserve's interest rate decision later in the week, appeared to weigh on ServiceNow's stock price. Despite the decline, the company's shares are still up around 10% over the past 12 months, and investors may be looking for opportunities to get back into the stock at a more attractive price.