ServiceNow (NOW) closed at $824.03 in the latest trading session, marking a +1.54% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.67% for the day. Elsewhere, the Dow saw an upswing of 0.56%, while the tech-heavy Nasdaq appreciated by 0.87%.
Heading into today, shares of the maker of software that automates companies' technology operations had lost 10.43% over the past month, lagging the Computer and Technology sector's loss of 7.99% and the S&P 500's loss of 5.28% in that time.
The investment community will be closely monitoring the performance of ServiceNow in its forthcoming earnings report. It is anticipated that the company will report an EPS of $3.78, marking a 10.85% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $3.09 billion, indicating a 18.53% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $16.21 per share and a revenue of $13.03 billion, indicating changes of +16.45% and +18.63%, respectively, from the former year.
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. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.18% decrease. ServiceNow is currently sporting a Zacks Rank of #4 (Sell).
In terms of valuation, ServiceNow is currently trading at a Forward P/E ratio of 50.06. This expresses a premium compared to the average Forward P/E of 19.24 of its industry.
We can additionally observe that NOW currently boasts a PEG ratio of 2.08. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computers - IT Services industry held an average PEG ratio of 1.97.
The Computers - IT Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 135, placing it within the bottom 46% of over 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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ServiceNow, Inc. (NOW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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