ServiceNow (NOW) Gains As Market Dips: What You Should Know
ServiceNow (NOW) closed the most recent trading day at $518.30, moving +1.81% from the previous trading session. This change outpaced the S&P 500's 0.63% loss on the day. Elsewhere, the Dow lost 0.55%, while the tech-heavy Nasdaq lost 0.1%.
Heading into today, shares of the maker of software that automates companies' technology operations had gained 11.14% over the past month, outpacing the Computer and Technology sector's gain of 8.45% and the S&P 500's gain of 5.91% in that time.
Investors will be hoping for strength from NOW as it approaches its next earnings release, which is expected to be October 28, 2020. The company is expected to report EPS of $1.03, up 4.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.11 billion, up 25.34% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.43 per share and revenue of $4.41 billion, which would represent changes of +33.43% and +27.38%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for NOW. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. NOW is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, NOW is currently trading at a Forward P/E ratio of 114.8. This represents a premium compared to its industry's average Forward P/E of 29.42.
Investors should also note that NOW has a PEG ratio of 3.97 right now. 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. The Computers - IT Services industry currently had an average PEG ratio of 2.56 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 184, putting it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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ServiceNow, Inc. (NOW): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.