In the latest trading session, ServiceNow (NOW) closed at $753.91, marking a -0.12% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.16%. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq gained 0.49%.
Heading into today, shares of the maker of software that automates companies' technology operations had gained 3.56% over the past month, lagging the Computer and Technology sector's gain of 5.94% and outpacing the S&P 500's gain of 3.22% in that time.
Investors will be eagerly watching for the performance of ServiceNow in its upcoming earnings disclosure. In that report, analysts expect ServiceNow to post earnings of $2.85 per share. This would mark year-over-year growth of 20.25%. Alongside, our most recent consensus estimate is anticipating revenue of $2.61 billion, indicating a 21.22% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $13.51 per share and revenue of $10.88 billion, indicating changes of +25.32% and +21.31%, respectively, compared to the previous year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for ServiceNow. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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.
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. At present, ServiceNow boasts a Zacks Rank of #3 (Hold).
Looking at valuation, ServiceNow is presently trading at a Forward P/E ratio of 55.87. This signifies a premium in comparison to the average Forward P/E of 26.64 for its industry.
We can additionally observe that NOW currently boasts a PEG ratio of 2.28. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Computers - IT Services industry was having an average PEG ratio of 2.95.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 99, finds itself in the top 40% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within 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 follow all of these stock-moving metrics, and many more, on Zacks.com.
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