In the latest trading session, ServiceNow (NOW - Free Report) closed at $262.49, marking a -0.64% move from the previous day. This change lagged the S&P 500's 0.21% gain on the day. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.27%.
Coming into today, shares of the maker of software that automates companies' technology operations had lost 2.3% in the past month. In that same time, the Computer and Technology sector lost 8.68%, while the S&P 500 lost 5.26%.
NOW will be looking to display strength as it nears its next earnings release. In that report, analysts expect NOW to post earnings of $0.64 per share. This would mark year-over-year growth of 30.61%. Meanwhile, our latest consensus estimate is calling for revenue of $830.81 million, up 31.65% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.20 per share and revenue of $3.44 billion. These totals would mark changes of +28.51% and +32.03%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for NOW. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
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.
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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. NOW currently has a Zacks Rank of #2 (Buy).
Investors should also note NOW's current valuation metrics, including its Forward P/E ratio of 82.54. For comparison, its industry has an average Forward P/E of 18.76, which means NOW is trading at a premium to the group.
Investors should also note that NOW has a PEG ratio of 2.95 right now. 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. The Computers - IT Services was holding an average PEG ratio of 1.56 at yesterday's closing price.
The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 95, putting it in the top 38% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
You can find more information on all of these metrics, and much more, on Zacks.com.