ServiceNow (NOW) Stock Moves -0.56%: What You Should Know
ServiceNow (NOW) closed the most recent trading day at $521.95, moving -0.56% from the previous trading session. This change was narrower than the S&P 500's 1.63% loss on the day. At the same time, the Dow lost 1.44%, and the tech-heavy Nasdaq lost 1.65%.
Heading into today, shares of the maker of software that automates companies' technology operations had gained 15.66% over the past month, outpacing the Computer and Technology sector's gain of 5.81% and the S&P 500's gain of 2.86% in that time.
Wall Street will be looking for positivity from NOW as it approaches its next earnings report date. This is expected to be October 28, 2020. In that report, analysts expect NOW to post earnings of $1.03 per share. This would mark year-over-year growth of 4.04%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.11 billion, up 25.34% from the year-ago period.
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.
Investors should also note any recent changes to analyst estimates for NOW. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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. Within the past 30 days, our consensus EPS projection remained stagnant. NOW is currently a Zacks Rank #3 (Hold).
Looking at its valuation, NOW is holding a Forward P/E ratio of 118.36. Its industry sports an average Forward P/E of 27.64, so we one might conclude that NOW is trading at a premium comparatively.
It is also worth noting that NOW currently has a PEG ratio of 4.15. 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 2.31 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 118, which puts it in the top 47% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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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.