ServiceNow (NOW) Exceeds Market Returns: Some Facts to Consider
The latest trading session saw ServiceNow (NOW) ending at $771.34, denoting a +1.52% adjustment from its last day's close. The stock outperformed the S&P 500, which registered a daily gain of 0.52%. At the same time, the Dow added 0.12%, and the tech-heavy Nasdaq gained 0.9%.
Prior to today's trading, shares of the maker of software that automates companies' technology operations had lost 0.73% over the past month. This has lagged the Computer and Technology sector's gain of 1.9% and the S&P 500's gain of 3.85% in that time.
Investors will be eagerly watching for the performance of ServiceNow in its upcoming earnings disclosure. The company is forecasted to report an EPS of $3.13, showcasing a 32.07% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $2.58 billion, indicating a 23.2% growth compared to the corresponding quarter of the prior year.
NOW's full-year Zacks Consensus Estimates are calling for earnings of $13.18 per share and revenue of $10.86 billion. These results would represent year-over-year changes of +22.26% and +21.08%, respectively.
Investors should also pay attention to any latest changes in analyst estimates for ServiceNow. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Currently, ServiceNow is carrying a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that ServiceNow has a Forward P/E ratio of 57.65 right now. This signifies a premium in comparison to the average Forward P/E of 28.27 for its industry.
Investors should also note that NOW has a PEG ratio of 2.24 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. NOW's industry had an average PEG ratio of 2.65 as of yesterday's close.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 77, finds itself in the top 31% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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ServiceNow, Inc. (NOW) : Free Stock Analysis Report
