The latest trading session saw ServiceNow (NOW) ending at $1,009.79, denoting a -1.66% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.55%. Elsewhere, the Dow saw an upswing of 0.25%, while the tech-heavy Nasdaq appreciated by 0.63%.
Heading into today, shares of the maker of software that automates companies' technology operations had gained 1.11% over the past month, lagging the Computer and Technology sector's gain of 11.3% and the S&P 500's gain of 6.29% in that time.
Market participants will be closely following the financial results of ServiceNow in its upcoming release. On that day, ServiceNow is projected to report earnings of $3.53 per share, which would represent year-over-year growth of 12.78%. In the meantime, our current consensus estimate forecasts the revenue to be $3.12 billion, indicating a 18.79% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $16.51 per share and a revenue of $13.01 billion, indicating changes of +18.61% and +18.42%, respectively, from the former year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for ServiceNow. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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 0.27% upward. Right now, ServiceNow possesses a Zacks Rank of #3 (Hold).
Looking at its valuation, ServiceNow is holding a Forward P/E ratio of 62.2. For comparison, its industry has an average Forward P/E of 19.39, which means ServiceNow is trading at a premium to the group.
Investors should also note that NOW has a PEG ratio of 2.63 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Computers - IT Services industry stood at 2.14 at the close of the market yesterday.
The Computers - IT Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 87, this industry ranks in the top 36% 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.
Be sure to follow all of these stock-moving metrics, and many 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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