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ServiceNow (NOW) Stock Moves -0.29%: What You Should Know

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ServiceNow (NOW - Free Report) closed the latest trading day at $686.23, indicating a -0.29% change from the previous session's end. The stock's change was more than the S&P 500's daily loss of 0.39%. On the other hand, the Dow registered a loss of 0.19%, and the technology-centric Nasdaq decreased by 0.59%.

Coming into today, shares of the maker of software that automates companies' technology operations had gained 12.1% in the past month. In that same time, the Computer and Technology sector gained 6.19%, while the S&P 500 gained 5.08%.

The investment community will be closely monitoring the performance of ServiceNow in its forthcoming earnings report. The company is expected to report EPS of $2.78, up 21.93% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.4 billion, up 23.47% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $10.44 per share and revenue of $8.93 billion. These totals would mark changes of +37.55% and +23.27%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ServiceNow. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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 has moved 0.99% higher. ServiceNow currently has a Zacks Rank of #2 (Buy).

In the context of valuation, ServiceNow is at present trading with a Forward P/E ratio of 65.93. This denotes a premium relative to the industry's average Forward P/E of 24.78.

We can also see that NOW currently has a PEG ratio of 2.34. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Computers - IT Services industry currently had an average PEG ratio of 2.34 as of yesterday's close.

The Computers - IT Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 53, positioning it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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