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ServiceNow (NOW) Ascends While Market Falls: Some Facts to Note

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In the latest close session, ServiceNow (NOW - Free Report) was up +2.53% at $157.00. This change outpaced the S&P 500's 1.21% loss on the day. Elsewhere, the Dow saw an upswing of 0.02%, while the tech-heavy Nasdaq depreciated by 2.6%.

Heading into today, shares of the maker of software that automates companies' technology operations had gained 8.77% over the past month, outpacing the Computer and Technology sector's loss of 3.87% and the S&P 500's loss of 0.03%.

Market participants will be closely following the financial results of ServiceNow in its upcoming release. The company plans to announce its earnings on October 28, 2026. The company is forecasted to report an EPS of $1.02, showcasing a 6.25% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $4.09 billion, indicating a 19.96% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.06 per share and revenue of $16.17 billion. These totals would mark changes of +15.67% and +21.8%, 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 business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. ServiceNow is holding a Zacks Rank of #4 (Sell) right now.

With respect to valuation, ServiceNow is currently being traded at a Forward P/E ratio of 37.7. This indicates a premium in contrast to its industry's Forward P/E of 15.6.

One should further note that NOW currently holds a PEG ratio of 1.54. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computers - IT Services was holding an average PEG ratio of 1.31 at yesterday's closing price.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 99, finds itself in the top 41% echelons 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.

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

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