ServiceNow (NOW) closed at $917.74 in the latest trading session, marking a -1.17% move from the prior day. This move lagged the S&P 500's daily loss of 0.64%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, lost 1.15%.
Coming into today, shares of the maker of software that automates companies' technology operations had lost 1.54% in the past month. In that same time, the Computer and Technology sector gained 2.91%, while the S&P 500 gained 1.91%.
The upcoming earnings release of ServiceNow will be of great interest to investors. The company is forecasted to report an EPS of $4.22, showcasing a 13.44% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $3.35 billion, reflecting a 19.88% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $16.79 per share and a revenue of $13.14 billion, representing changes of +20.62% and +19.64%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for ServiceNow. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.1% fall in the Zacks Consensus EPS estimate. Currently, ServiceNow is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, ServiceNow is currently trading at a Forward P/E ratio of 55.3. This denotes a premium relative to the industry average Forward P/E of 16.87.
It's also important to note that NOW currently trades at a PEG ratio of 2.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Computers - IT Services industry held an average PEG ratio of 2.11.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 158, which puts it in the bottom 37% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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ServiceNow, Inc. (NOW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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