ServiceNow (NOW) closed the most recent trading day at $240.98, moving -0.38% from the previous trading session. This change lagged the S&P 500's daily gain of 0.37%. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq added 0.34%.
Coming into today, shares of the maker of software that automates companies' technology operations had gained 3.36% in the past month. In that same time, the Computer and Technology sector gained 4.35%, while the S&P 500 gained 1.83%.
NOW will be looking to display strength as it nears its next earnings release. On that day, NOW is projected to report earnings of $0.55 per share, which would represent a year-over-year decline of 1.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $767.16 million, up 30.2% from the year-ago period.
NOW's full-year Zacks Consensus Estimates are calling for earnings of $3.12 per share and revenue of $3.42 billion. These results would represent year-over-year changes of +25.3% and +31.25%, respectively.
Investors might also notice recent changes to analyst estimates for NOW. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. NOW currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, NOW is holding a Forward P/E ratio of 77.59. This valuation marks a premium compared to its industry's average Forward P/E of 20.72.
It is also worth noting that NOW currently has a PEG ratio of 2.77. 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. The Computers - IT Services was holding an average PEG ratio of 1.63 at yesterday's closing price.
The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 45, putting it in the top 18% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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