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ServiceNow (NOW) Laps the Stock Market: Here's Why
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ServiceNow (NOW - Free Report) closed the most recent trading day at $548.64, moving +1.37% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.81%. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq added 1.35%.
The the stock of maker of software that automates companies' technology operations has fallen by 9.36% in the past month, lagging the Computer and Technology sector's loss of 6.4% and the S&P 500's loss of 6.19%.
The upcoming earnings release of ServiceNow will be of great interest to investors. The company is forecasted to report an EPS of $2.54, showcasing a 29.59% upward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $2.27 billion, showing a 24.07% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.99 per share and revenue of $8.9 billion. These totals would mark changes of +31.62% and +22.83%, respectively, from last year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for ServiceNow. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. ServiceNow currently has a Zacks Rank of #2 (Buy).
Looking at valuation, ServiceNow is presently trading at a Forward P/E ratio of 54.18. Its industry sports an average Forward P/E of 23.82, so one might conclude that ServiceNow is trading at a premium comparatively.
It's also important to note that NOW currently trades at a PEG ratio of 1.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Computers - IT Services industry held an average PEG ratio of 2.06.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 76, which puts it in the top 31% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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ServiceNow (NOW) Laps the Stock Market: Here's Why
ServiceNow (NOW - Free Report) closed the most recent trading day at $548.64, moving +1.37% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.81%. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq added 1.35%.
The the stock of maker of software that automates companies' technology operations has fallen by 9.36% in the past month, lagging the Computer and Technology sector's loss of 6.4% and the S&P 500's loss of 6.19%.
The upcoming earnings release of ServiceNow will be of great interest to investors. The company is forecasted to report an EPS of $2.54, showcasing a 29.59% upward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $2.27 billion, showing a 24.07% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.99 per share and revenue of $8.9 billion. These totals would mark changes of +31.62% and +22.83%, respectively, from last year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for ServiceNow. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. ServiceNow currently has a Zacks Rank of #2 (Buy).
Looking at valuation, ServiceNow is presently trading at a Forward P/E ratio of 54.18. Its industry sports an average Forward P/E of 23.82, so one might conclude that ServiceNow is trading at a premium comparatively.
It's also important to note that NOW currently trades at a PEG ratio of 1.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Computers - IT Services industry held an average PEG ratio of 2.06.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 76, which puts it in the top 31% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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.