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Here is Why ServiceNow (NOW) is a Terrific Investment Choice
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ServiceNow (NOW - Free Report) is riding on strong fundamentals, driven by a robust portfolio and an expanding clientele.
NOW’s prospects are also benefiting from the bullish U.S. equity market trends, backed by the decline in energy prices, moderating inflationary pressures and a stable Fed policy. The improvements in supply chain conditions lowered investors’ concerns regarding the global economic recovery.
All major stock indices are in positive territory year to date. The Dow Industrial, Nasdaq and S&P 500 have moved up 1.78%, 29.9% and 14.4%, respectively. In this scenario, top-ranked stocks like ServiceNow can further boost investor portfolio returns.
An Outperformer: A glimpse at NOW’s price trend reveals that the stock has gained 39.8% year to date compared with the Zacks Computer - IT Services industry’s rise of 9.7%.
Trading Way Below 52-Week High: ServiceNow stock currently trades lower than its 52-week high, which reflects its potential to go upward. The stock’s closing price of $542.99 on Jun 23 was 5.85%, lower than the 52-week high of $576.68 attained on Jun 15, 2023.
Attractive Valuation: NOW currently trades at an attractive valuation multiple. The stock trades at one-year forward price-to-sales multiple of 11.38X compared with its five-year average of 12.25X.
Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Positive Earnings Surprise History: NOW has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average earnings surprise being 10.36%.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $9.59 per share, suggesting growth of 26.35%. The consensus estimate for 2024 earnings is pegged at $11.95 per share, indicating growth of 24.63%.
Robust Fundamental Growth Drivers: ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It continues to win market share by replacing legacy on-premise systems with cloud-based processes. Its focus toward public and big private entities is expected to drive top-line growth in the long run.
ServiceNow’s new AI powered solutions — Finance and Supply Chain Workflows, Now Assist for Search and ServiceNow Generative AI Controller — has been gaining significant traction and driving subscription revenues.
Partnerships with Microsoft and NVIDIA has benefited ServiceNow’s enterprise grade generative AI capabilities, which transform business processes with faster, more intelligent workflow automation. With these solutions, companies can expect to reduce costs while driving higher productivity and strengthening workflow automation.
In first-quarter 2023, ServiceNow added 280 new customers with more than $1 million in annual contract value, bringing the total client number to 1,682.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 38 cents north to $2.82 per share in the past 60 days. For 2023, earnings estimates have moved north by $1.45 to $11.94 per share in the past 60 days.
META's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the rest, the average surprise being 15.46%. Shares of the company have gained 139.9% in the year to date.
The Zacks Consensus Estimate for NVIDIA's second-quarter fiscal 2024 earnings has been revised $1 northward to $2.04 per share in the past 60 days. For fiscal 2024, earnings estimates have improved by 71% to $7.66 per share in the past 60 days.
NVDA’s earnings beat the Zacks Consensus Estimate in two of the preceding four quarters and missed the same twice, the average surprise being 0.26%. Shares of the company have risen 188.8% in the year to date.
The Zacks Consensus Estimate for IPG Photonics' second-quarter fiscal 2023 earnings has been revised 11 cents north to $1.23 per share in the past 60 days. For fiscal 2023, earnings estimates have moved north by 39 cents to $5.13 per share in the past 60 days.
IPGP's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average surprise being negative 58.76%. Shares of the company have gained 40.9% in the year to date.
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Here is Why ServiceNow (NOW) is a Terrific Investment Choice
ServiceNow (NOW - Free Report) is riding on strong fundamentals, driven by a robust portfolio and an expanding clientele.
NOW’s prospects are also benefiting from the bullish U.S. equity market trends, backed by the decline in energy prices, moderating inflationary pressures and a stable Fed policy. The improvements in supply chain conditions lowered investors’ concerns regarding the global economic recovery.
All major stock indices are in positive territory year to date. The Dow Industrial, Nasdaq and S&P 500 have moved up 1.78%, 29.9% and 14.4%, respectively. In this scenario, top-ranked stocks like ServiceNow can further boost investor portfolio returns.
ServiceNow, Inc. Price and Consensus
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
Why NOW is an Attractive Pick?
An Outperformer: A glimpse at NOW’s price trend reveals that the stock has gained 39.8% year to date compared with the Zacks Computer - IT Services industry’s rise of 9.7%.
Trading Way Below 52-Week High: ServiceNow stock currently trades lower than its 52-week high, which reflects its potential to go upward. The stock’s closing price of $542.99 on Jun 23 was 5.85%, lower than the 52-week high of $576.68 attained on Jun 15, 2023.
Attractive Valuation: NOW currently trades at an attractive valuation multiple. The stock trades at one-year forward price-to-sales multiple of 11.38X compared with its five-year average of 12.25X.
Solid Rank & Growth Score: ServiceNow currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Positive Earnings Surprise History: NOW has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average earnings surprise being 10.36%.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $9.59 per share, suggesting growth of 26.35%. The consensus estimate for 2024 earnings is pegged at $11.95 per share, indicating growth of 24.63%.
Robust Fundamental Growth Drivers: ServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It continues to win market share by replacing legacy on-premise systems with cloud-based processes. Its focus toward public and big private entities is expected to drive top-line growth in the long run.
ServiceNow’s new AI powered solutions — Finance and Supply Chain Workflows, Now Assist for Search and ServiceNow Generative AI Controller — has been gaining significant traction and driving subscription revenues.
Partnerships with Microsoft and NVIDIA has benefited ServiceNow’s enterprise grade generative AI capabilities, which transform business processes with faster, more intelligent workflow automation. With these solutions, companies can expect to reduce costs while driving higher productivity and strengthening workflow automation.
In first-quarter 2023, ServiceNow added 280 new customers with more than $1 million in annual contract value, bringing the total client number to 1,682.
Other Stocks to Consider
Some other top-ranked stocks from the broader Computer and Technology sector are Meta Platforms (META - Free Report) , NVIDIA (NVDA - Free Report) and IPG Photonics (IPGP - Free Report) . All the three stocks sport a Zacks Rank #1.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 38 cents north to $2.82 per share in the past 60 days. For 2023, earnings estimates have moved north by $1.45 to $11.94 per share in the past 60 days.
META's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the rest, the average surprise being 15.46%. Shares of the company have gained 139.9% in the year to date.
The Zacks Consensus Estimate for NVIDIA's second-quarter fiscal 2024 earnings has been revised $1 northward to $2.04 per share in the past 60 days. For fiscal 2024, earnings estimates have improved by 71% to $7.66 per share in the past 60 days.
NVDA’s earnings beat the Zacks Consensus Estimate in two of the preceding four quarters and missed the same twice, the average surprise being 0.26%. Shares of the company have risen 188.8% in the year to date.
The Zacks Consensus Estimate for IPG Photonics' second-quarter fiscal 2023 earnings has been revised 11 cents north to $1.23 per share in the past 60 days. For fiscal 2023, earnings estimates have moved north by 39 cents to $5.13 per share in the past 60 days.
IPGP's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average surprise being negative 58.76%. Shares of the company have gained 40.9% in the year to date.