ServiceNow (NOW – Free Report) closed the latest trading day at $830, indicating a -1.53% change from the previous session’s end. This move lagged the S&P 500’s daily loss of 1.07%. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, lost 1.71%.
Heading into today, shares of the maker of software that automates companies’ technology operations had lost 14.57% over the past month, lagging the Computer and Technology sector’s loss of 11.12% and the S&P 500’s loss of 7.03% 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 $3.78 per share, which would represent year-over-year growth of 10.85%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.09 billion, up 18.55% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $16.24 per share and revenue of $13.04 billion. These totals would mark changes of +16.67% and +18.69%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for ServiceNow. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, ServiceNow holds a Zacks Rank of #3 (Hold).
From a valuation perspective, ServiceNow is currently exchanging hands at a Forward P/E ratio of 51.91. For comparison, its industry has an average Forward P/E of 21.79, which means ServiceNow is trading at a premium to the group.
We can additionally observe that NOW currently boasts a PEG ratio of 2.16. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The Computers – IT Services industry had an average PEG ratio of 2.05 as trading concluded yesterday.
The Computers – IT Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 70, placing it within the top 28% of over 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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