ServiceNow (NOW) shares tumbled on Tuesday after Chief Executive Bill McDermott said the company’s sales cycle in Europe could be getting longer. The comments, made on CNBC on Monday, sent NOW stock down more than 12%.
In a report, BMO Capital Markets analyst Keith Bachman said McDermott spoke on CNBC with business analyst Jim Cramer.
“Most of the interview was about the productivity benefits of workflow, consistent with recent management comments,” Bachman said. “Bill also mentioned the headwinds of FX (currency), which we view as an apparent and obvious challenge for our coverage universe. However, Bill also mentioned some elongation of sales cycles in Europe.”
NOW stock tumbled 12.1% to 431.26 in midday trading on the stock market today.
NOW Stock: Earnings Due July 27
Santa Clara, Calif.-based ServiceNow will report second-quarter earnings on July 27.
Amid worries that the U.S. economy will fall into a recession, management at software stocks may signal a business slowdown on upcoming earnings calls.
The company’s software tracks and manages services provided by information technology departments. Also, its self-service tech portal enables company employees to access administrative and workflow tools.
Further, ServiceNow has expanded from its core business into software for human resources, customer service management and security.
Amid a big correction in software growth stocks, ServiceNow stock owns a Relative Strength Rating of 62 out of a best-possible 99. NOW stock has retreated 31% in 2022, according to IBD Stock Checkup.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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