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ServiceNow (NOW) Rises As Market Takes a Dip: Key Facts

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ServiceNow (NOW - Free Report) ended the recent trading session at $150.90, demonstrating a +1.4% change from the preceding day's closing price. The stock outpaced the S&P 500's daily loss of 0.34%. Elsewhere, the Dow saw a downswing of 0.94%, while the tech-heavy Nasdaq appreciated by 0.16%.

Shares of the maker of software that automates companies' technology operations have depreciated by 12.97% over the course of the past month, underperforming the Computer and Technology sector's loss of 1%, and the S&P 500's gain of 1.19%.

Market participants will be closely following the financial results of ServiceNow in its upcoming release. It is anticipated that the company will report an EPS of $0.87, marking a 19.18% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $3.52 billion, up 19.19% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.46 per share and revenue of $13.23 billion, indicating changes of +24.46% and 0%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for ServiceNow. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.03% downward. ServiceNow is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ServiceNow currently has a Forward P/E ratio of 36.88. Its industry sports an average Forward P/E of 17.42, so one might conclude that ServiceNow is trading at a premium comparatively.

We can additionally observe that NOW currently boasts a PEG ratio of 1.5. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Computers - IT Services industry had an average PEG ratio of 1.52.

The Computers - IT Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 109, placing it within the top 45% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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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