ServiceNow (NOW) Gains As Market Dips: What You Should Know
In the latest trading session, ServiceNow (NOW) closed at $267.79, marking a +0.56% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.2%. Meanwhile, the Dow lost 0.17%, and the Nasdaq, a tech-heavy index, lost 0.38%.
Coming into today, shares of the maker of software that automates companies' technology operations had lost 2.12% in the past month. In that same time, the Computer and Technology sector lost 1.9%, while the S&P 500 gained 0.33%.
Investors will be hoping for strength from NOW as it approaches its next earnings release. In that report, analysts expect NOW to post earnings of $0.64 per share. This would mark year-over-year growth of 30.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $830.81 million, up 31.65% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.20 per share and revenue of $3.44 billion. These totals would mark changes of +28.51% and +32.03%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for NOW. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
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. Within the past 30 days, our consensus EPS projection remained stagnant. NOW is currently a Zacks Rank #2 (Buy).
Digging into valuation, NOW currently has a Forward P/E ratio of 83.2. This represents a premium compared to its industry's average Forward P/E of 19.8.
It is also worth noting that NOW currently has a PEG ratio of 2.97. 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 1.66 based on yesterday's closing prices.
The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.