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ServiceNow (NOW) Stock Sinks As Market Gains: What You Should Know

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ServiceNow (NOW - Free Report) closed at $273.13 in the latest trading session, marking a -0.24% move from the prior day. This change lagged the S&P 500's daily gain of 0.15%. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq gained 0.05%.

Heading into today, shares of the maker of software that automates companies' technology operations had gained 13.44% over the past month, outpacing the Computer and Technology sector's gain of 1% and the S&P 500's gain of 1.32% in that time.

Investors will be hoping for strength from NOW as it approaches its next earnings release. In that report, analysts expect NOW to post earnings of $0.88 per share. This would mark year-over-year growth of 14.29%. Our most recent consensus estimate is calling for quarterly revenue of $942.59 million, up 31.75% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.24 per share and revenue of $3.45 billion, which would represent changes of +30.12% and +32.29%, respectively, from the prior year.

Any recent changes to analyst estimates for NOW should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 2.29% higher within the past month. NOW is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note NOW's current valuation metrics, including its Forward P/E ratio of 84.49. Its industry sports an average Forward P/E of 22.61, so we one might conclude that NOW is trading at a premium comparatively.

Meanwhile, NOW's PEG ratio is currently 3.02. 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 industry currently had an average PEG ratio of 1.92 as of yesterday's close.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 42% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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