ServiceNow (NOW) closed the most recent trading day at $121.93, moving -1.94% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.83%. On the other hand, the Dow registered a gain of 0.5%, and the technology-centric Nasdaq increased by 1.38%.
Heading into today, shares of the maker of software that automates companies' technology operations had gained 23.43% over the past month, outpacing the Computer and Technology sector's loss of 3.51% and the S&P 500's loss of 2.65%.
The investment community will be closely monitoring the performance of ServiceNow in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $0.95, reflecting a 17.28% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $3.75 billion, up 21.39% from the year-ago period.
NOW's full-year Zacks Consensus Estimates are calling for earnings of $4.12 per share and revenue of $15.98 billion. These results would represent year-over-year changes of +17.38% and +20.31%, respectively.
It's also important for investors to be aware of any recent modifications to analyst estimates for ServiceNow. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0% upward. 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 30.18. For comparison, its industry has an average Forward P/E of 14.37, which means ServiceNow is trading at a premium to the group.
One should further note that NOW currently holds a PEG ratio of 1.26. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Computers - IT Services industry had an average PEG ratio of 1.24.
The Computers - IT Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 73, this industry ranks in the top 30% of all industries, numbering over 250.
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.
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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