ServiceNow stock falls despite earnings beat as CEO Bill McDermott tries to get investors to stop thinking of it as a SaaS company

ServiceNow CEO Bill McDermott has been on a mission to persuade investors to stop thinking of his enterprise software company as a standard SaaS (software-as-a-service) business.

So far, McDermott has met with skepticism from the Street, which has been fixated on the lofty valuation of ServiceNow’s shares. The stock trades at a trailing price-to-earnings ratio that is more than twice that of some competitors, such as Salesforce. As a result, ServiceNow’s stock has declined 40% over the past year despite consistently strong results.