ServiceNow (NOW) closed the most recent trading day at $246.85, moving -1.31% from the previous trading session. This move was narrower than the S&P 500’s daily loss of 1.79%. At the same time, the Dow lost 1.86%, and the tech-heavy Nasdaq lost 1.56%.
Prior to today’s trading, shares of the maker of software that automates companies’ technology operations had lost 5.03% over the past month. This has lagged the Computer and Technology sector’s gain of 1.04% and the S&P 500’s gain of 0.72% in that time.
Wall Street will be looking for positivity from NOW as it approaches its next earnings report date. On that day, NOW is projected to report earnings of $0.89 per share, which would represent year-over-year growth of 30.88%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $886.13 million, up 31.65% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.24 per share and revenue of $3.46 billion, which would represent changes of +30.12% and +32.56%, respectively, from the prior year.
Any recent changes to analyst estimates for NOW should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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 has moved 1.18% lower within the past month. NOW is currently a Zacks Rank #3 (Hold).
Investors should also note NOW’s current valuation metrics, including its Forward P/E ratio of 77.24. Its industry sports an average Forward P/E of 21.5, so we one might conclude that NOW is trading at a premium comparatively.
Also, we should mention that NOW has a PEG ratio of 2.76. 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. Computers – IT Services stocks are, on average, holding a PEG ratio of 1.71 based on yesterday’s closing prices.
The Computers – IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 95, which puts it in the top 38% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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