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ServiceNow (NOW) Surges 4.6%: Is This an Indication of Further Gains?

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ServiceNow (NOW - Free Report) shares soared 4.6% in the last trading session to close at $928.6. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.2% loss over the past four weeks.

ServiceNow is benefiting from the rising adoption of workflows by enterprises undergoing digital transformation.

This maker of software that automates companies' technology operations is expected to post quarterly earnings of $4.22 per share in its upcoming report, which represents a year-over-year change of +13.4%. Revenues are expected to be $3.35 billion, up 19.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For ServiceNow, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NOW going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

ServiceNow is part of the Zacks Computers - IT Services industry. Accenture (ACN - Free Report) , another stock in the same industry, closed the last trading session 0.4% lower at $256.17. ACN has returned -6.2% in the past month.

Accenture's consensus EPS estimate for the upcoming report has changed +0.2% over the past month to $2.98. Compared to the company's year-ago EPS, this represents a change of +6.8%. Accenture currently boasts a Zacks Rank of #3 (Hold).


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