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Why ServiceNow (NOW) Dipped More Than Broader Market Today

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ServiceNow (NOW - Free Report) closed at $769.19 in the latest trading session, marking a -1.67% move from the prior day. This change lagged the S&P 500's daily loss of 0.95%. Meanwhile, the Dow lost 1.09%, and the Nasdaq, a tech-heavy index, lost 0.84%.

Coming into today, shares of the maker of software that automates companies' technology operations had lost 0.93% in the past month. In that same time, the Computer and Technology sector gained 1.67%, while the S&P 500 gained 1.78%.

The investment community will be paying close attention to the earnings performance of ServiceNow in its upcoming release. The company is slated to reveal its earnings on April 24, 2024. The company's earnings per share (EPS) are projected to be $3.15, reflecting a 32.91% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $2.58 billion, reflecting a 23.22% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $13.27 per share and a revenue of $10.86 billion, signifying shifts of +23.1% and +21.09%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. ServiceNow currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ServiceNow has a Forward P/E ratio of 58.94 right now. This signifies a premium in comparison to the average Forward P/E of 25.64 for its industry.

We can additionally observe that NOW currently boasts a PEG ratio of 2.29. 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. As the market closed yesterday, the Computers - IT Services industry was having an average PEG ratio of 2.3.

The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 62, putting it in the top 25% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NOW in the coming trading sessions, be sure to utilize Zacks.com.

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