ServiceNow (NOW) Gains But Lags Market: What You Should Know
In the latest trading session, ServiceNow (NOW) closed at $414.89, marking a +0.39% move from the previous day. This change lagged the S&P 500's 0.4% gain on the day. Meanwhile, the Dow gained 0.33%, and the Nasdaq, a tech-heavy index, lost 1.1%.
Prior to today's trading, shares of the maker of software that automates companies' technology operations had gained 3.15% over the past month. This has outpaced the Computer and Technology sector's loss of 0.9% and the S&P 500's loss of 0.01% in that time.
Investors will be hoping for strength from ServiceNow as it approaches its next earnings release, which is expected to be January 25, 2023. The company is expected to report EPS of $2, up 36.99% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.93 billion, up 19.82% from the prior-year quarter.
Any recent changes to analyst estimates for ServiceNow should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.27% lower. ServiceNow is currently a Zacks Rank #3 (Hold).
In terms of valuation, ServiceNow is currently trading at a Forward P/E ratio of 45.97. This represents a premium compared to its industry's average Forward P/E of 20.08.
It is also worth noting that NOW currently has a PEG ratio of 1.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computers - IT Services stocks are, on average, holding a PEG ratio of 1.12 based on yesterday's closing prices.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 84, which puts it in the top 34% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow NOW in the coming trading sessions, be sure to utilize Zacks.com.
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ServiceNow, Inc. (NOW) : Free Stock Analysis Report
