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ServiceNow (NOW) closed the latest trading day at $830, indicating a -1.53% change from the previous session's end. This move lagged the S&P 500's daily loss of 1.07%. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, lost 1.71%.
Heading into today, shares of the maker of software that automates companies' technology operations had lost 14.57% over the past month, lagging the Computer and Technology sector's loss of 11.12% and the S&P 500's loss of 7.03% in that time.
Market participants will be closely following the financial results of ServiceNow in its upcoming release. On that day, ServiceNow is projected to report earnings of $3.78 per share, which would represent year-over-year growth of 10.85%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.09 billion, up 18.55% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $16.24 per share and revenue of $13.04 billion. These totals would mark changes of +16.67% and +18.69%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for ServiceNow. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, ServiceNow holds a Zacks Rank of #3 (Hold).
From a valuation perspective, ServiceNow is currently exchanging hands at a Forward P/E ratio of 51.91. For comparison, its industry has an average Forward P/E of 21.79, which means ServiceNow is trading at a premium to the group.
We can additionally observe that NOW currently boasts a PEG ratio of 2.16. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Computers - IT Services industry had an average PEG ratio of 2.05 as trading concluded yesterday.