ServiceNow (NOW) closed the most recent trading day at $1,005.13, moving +1.67% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.94%. Elsewhere, the Dow gained 0.75%, while the tech-heavy Nasdaq added 1.52%.
Coming into today, shares of the maker of software that automates companies' technology operations had lost 4.95% in the past month. In that same time, the Computer and Technology sector gained 3.9%, while the S&P 500 gained 1.67%.
The upcoming earnings release of ServiceNow will be of great interest to investors. In that report, analysts expect ServiceNow to post earnings of $3.53 per share. This would mark year-over-year growth of 12.78%. Simultaneously, our latest consensus estimate expects the revenue to be $3.12 billion, showing a 18.79% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $16.51 per share and revenue of $13.01 billion. These totals would mark changes of +18.61% and +18.42%, respectively, from last year.
Any recent changes to analyst estimates for ServiceNow should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, 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 last 30 days, the Zacks Consensus EPS estimate has moved 0.27% higher. ServiceNow is currently a Zacks Rank #3 (Hold).
In terms of valuation, ServiceNow is presently being traded at a Forward P/E ratio of 59.88. Its industry sports an average Forward P/E of 20.51, so one might conclude that ServiceNow is trading at a premium comparatively.
We can additionally observe that NOW currently boasts a PEG ratio of 2.53. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Computers - IT Services industry was having an average PEG ratio of 2.05.
The Computers - IT Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 78, positioning it in the top 32% of all 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming 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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