ServiceNow (NOW) closed the most recent trading day at $947.78, moving -1.39% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.44%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, added 0.7%.
The maker of software that automates companies' technology operations's stock has climbed by 8.39% in the past month, falling short of the Computer and Technology sector's gain of 9.59% and outpacing the S&P 500's gain of 4.03%.
Investors will be eagerly watching for the performance of ServiceNow in its upcoming earnings disclosure. On that day, ServiceNow is projected to report earnings of $4.21 per share, which would represent year-over-year growth of 13.17%. In the meantime, our current consensus estimate forecasts the revenue to be $3.35 billion, indicating a 19.88% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $16.81 per share and revenue of $13.14 billion, indicating changes of +20.76% and +19.64%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for ServiceNow. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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, the Zacks Consensus EPS estimate has shifted 0.07% downward. As of now, ServiceNow holds a Zacks Rank of #3 (Hold).
From a valuation perspective, ServiceNow is currently exchanging hands at a Forward P/E ratio of 57.17. This denotes a premium relative to the industry average Forward P/E of 16.7.
We can additionally observe that NOW currently boasts a PEG ratio of 2.4. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computers - IT Services industry currently had an average PEG ratio of 2.07 as of yesterday's close.
The Computers - IT Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 103, this industry ranks in the top 42% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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ServiceNow, Inc. (NOW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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