In the latest trading session, ServiceNow (NOW) closed at $996.32, marking a +1.62% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.11%. Elsewhere, the Dow gained 1.19%, while the tech-heavy Nasdaq added 1.43%.
Shares of the maker of software that automates companies' technology operations have depreciated by 2.39% over the course of the past month, underperforming the Computer and Technology sector's gain of 5.67%, and the S&P 500's gain of 3.92%.
Analysts and investors alike will be keeping a close eye on the performance of ServiceNow in its upcoming earnings disclosure. The company is predicted to post an EPS of $3.53, indicating a 12.78% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $3.12 billion, indicating a 18.79% increase compared to the same quarter of the previous 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 +18.43%, respectively, from the former year.
Investors might also notice recent changes to analyst estimates for ServiceNow. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, ServiceNow boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, ServiceNow is holding a Forward P/E ratio of 59.38. This expresses a premium compared to the average Forward P/E of 21.07 of its industry.
We can also see that NOW currently has a PEG ratio of 2.51. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NOW's industry had an average PEG ratio of 2.08 as of yesterday's close.
The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 77, putting it in the top 32% 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.
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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