So didn’t see this posted, but I think it’s a clear indication that business in the cloud sector continues to move forward with no reported slowdown to date.
Service Now and Qualtrics tonight both beat and raised. With Microsoft showing continued strong cloud services growth last night, its great to see a follow up tonight with business as usual messages from two more cloud companies and no reported slowdown in guidance. Quite the opposite. Both stock were up 10% AH.
This market is giving us a gift in allowing us to step in here and buy great young companies 50% cheaper then they were two months ago on no real news effecting their businesses. At least no slowdown has yet to be reported that I’m seeing.
“ServiceNow and Qualtrics, two notable cloud software companies, topped estimates on Wednesday and delivered guidance that also exceeded expectations.
Both stocks were up big after hours, giving a boost to a sector that’s been hammered of late.
“We are in a sustained demand environment here,” ServiceNow CEO Bill McDermott said on his company’s earnings call.”
ServiceNow (and MSFT for sure) have actual earnings, which makes the “market” feel more comfortable than possible earnings in 5 years from now. According to FinViz, NOW has EPS (ttm) of $1.14, but expects earnings of $9.33 next year, which makes the forward PE about 60. And the forward P/S of about 18.
Which is to say, don’t translate reactions of growth stocks with positive earnings to those with no earnings. We will have to wait and see if our non-earnings stocks react as well
DDOG, UPST, ZI have current earnings
SNOW, NET, CRWD, are expected to finally have tiny earnings next year.
SentinelOne, MNDY, AMPL are still highly negative next year.
It will interesting to see the different reactions when all report. At some point, everyone is done selling, and things will turn. I don’t think we have had a full capitulation yet, though anecdotally, one of my retired friends that also invested in a lot of growth stock finally sold out and is moving his money to Fisher. He sold that morning we were way down and got out before it turned around in the afternoon Classic.