In the latest trading session, ServiceNow (NOW - Free Report) closed at $377.98, marking a +1.84% move from the previous day. This change outpaced the S&P 500's 0.21% loss on the day. At the same time, the Dow lost 0.58%, and the tech-heavy Nasdaq lost 0.46%.
Investors will be hoping for strength from NOW as it approaches its next earnings release. On that day, NOW is projected to report earnings of $1.02 per share, which would represent year-over-year growth of 43.66%. Our most recent consensus estimate is calling for quarterly revenue of $1.05 billion, up 25.58% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.24 per share and revenue of $4.34 billion. These totals would mark changes of +27.71% and +25.49%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for NOW. These revisions help to show the ever-changing nature of near-term business trends. 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 has moved 22.3% higher. NOW is currently a Zacks Rank #2 (Buy).
Looking at its valuation, NOW is holding a Forward P/E ratio of 87.44. This represents a premium compared to its industry's average Forward P/E of 22.01.
It is also worth noting that NOW currently has a PEG ratio of 3.1. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. NOW's industry had an average PEG ratio of 2.04 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 84, which puts it in the top 34% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.