ServiceNow (NOW) closed at $127.65 in the latest trading session, marking a -6.04% move from the prior day. This change lagged the S&P 500's 0.13% gain on the day. Meanwhile, the Dow gained 0.45%, and the Nasdaq, a tech-heavy index, added 0.03%.
The maker of software that automates companies' technology operations's stock has climbed by 47.72% in the past month, exceeding the Computer and Technology sector's gain of 11.37% and the S&P 500's gain of 5.25%.
The investment community will be paying close attention to the earnings performance of ServiceNow in its upcoming release. The company is forecasted to report an EPS of $0.86, showcasing a 4.88% upward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $3.92 billion, up 22% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.14 per share and a revenue of $16.18 billion, representing changes of +17.95% and +21.88%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for ServiceNow. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. ServiceNow is holding a Zacks Rank of #4 (Sell) right now.
Looking at its valuation, ServiceNow is holding a Forward P/E ratio of 32.84. For comparison, its industry has an average Forward P/E of 14.18, which means ServiceNow is trading at a premium to the group.
Meanwhile, NOW's PEG ratio is currently 1.28. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computers - IT Services stocks are, on average, holding a PEG ratio of 1.2 based on yesterday's closing prices.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 192, finds itself in the bottom 22% echelons of all 250+ industries.
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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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ServiceNow, Inc. (NOW): Free Stock Analysis Report
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