By Jon Swartz
ServiceNow Inc. is going mobile in a big way.
The Silicon Valley company, which is leading a digital revolution across businesses that is “hiding all the complexity of work,” as CEO John Donahoe put it in a recent interview, on Wednesday patched a hole in its product line with two new mobile apps.
The apps are designed to “reduce friction and complexity” at large organizations with tasks ranging from fixing an IT issue to onboarding employees, Blake McConnell, senior vice president of employee workflow products at ServiceNow, told MarketWatch in a phone interview.
The mobile piece to the enterprise puzzle is crucial as companies mix and match complementary products from ServiceNow, Salesforce.com Inc. /zigman2/quotes/200515854/composite CRM +0.44% , Workday Inc. /zigman2/quotes/201157610/composite WDAY +1.61% , and others to ramp up their shift to the cloud, according to analysts.
“ServiceNow has historically struggled, both strategically and from a features perspective, when it comes to mobility,” Adam Holtby, a senior analyst at Ovum briefed on ServiceNow’s new products, told MarketWatch. “This is a step in the right direction.”
That should come as even better news for investors who have seen ServiceNow /zigman2/quotes/202729495/composite NOW -1.22% shares quadruple since January 2016 to $261.32 as of Tuesday’s close. One analyst predicts the company is on the fast track to top $10 billion in revenue in several years.
ServiceNow reported earnings of 71 cents a share during its second quarter on revenue of $834 million, with 94% coming from subscription-related sales. Analysts polled by FactSet anticipate earnings of 88 cents a share in the current quarter on revenue of $885 million, and $3.46 billion for the fiscal year.
Evercore ISI analyst Kirk Materne believes ServiceNow isn’t merely in position to reach its publicly stated goal of $4 billion in revenue by the end of 2020, but could soar to more than $10 billion by 2025.
The market is clearly for the picking, says Materne, who estimates 30% of ServiceNow’s new business is replacing spreadsheets and other manual processes. He has an Outperform rating and target price of $230 for ServiceNow.