ServiceNow (NOW) Outpaces Stock Market Gains: What You Should Know
ServiceNow (NOW) closed the most recent trading day at $386.47, moving +1.09% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.1%. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq lost 0.09%.
Coming into today, shares of the maker of software that automates companies' technology operations had lost 1.31% in the past month. In that same time, the Computer and Technology sector lost 5.51%, while the S&P 500 lost 3.6%.
ServiceNow will be looking to display strength as it nears its next earnings release. On that day, ServiceNow is projected to report earnings of $2 per share, which would represent year-over-year growth of 36.99%. Our most recent consensus estimate is calling for quarterly revenue of $1.93 billion, up 19.82% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.32 per share and revenue of $7.24 billion. These totals would mark changes of +23.65% and +22.8%, respectively, from last year.
Any recent changes to analyst estimates for ServiceNow should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. Within the past 30 days, our consensus EPS projection remained stagnant. ServiceNow is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that ServiceNow has a Forward P/E ratio of 52.23 right now. For comparison, its industry has an average Forward P/E of 21.49, which means ServiceNow is trading at a premium to the group.
It is also worth noting that NOW currently has a PEG ratio of 1.85. 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 1.29 as of yesterday's close.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 32% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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ServiceNow, Inc. (NOW) : Free Stock Analysis Report
