In This Article:
The latest trading session saw ServiceNow (NOW) ending at $929.76, denoting a +0.96% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily gain of 1.59%. Meanwhile, the Dow experienced a rise of 1.39%, and the technology-dominated Nasdaq saw an increase of 1.63%.
Coming into today, shares of the maker of software that automates companies' technology operations had lost 9.06% in the past month. In that same time, the Computer and Technology sector lost 3.43%, while the S&P 500 lost 2.42%.
Analysts and investors alike will be keeping a close eye on the performance of ServiceNow in its upcoming earnings disclosure. 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, our latest consensus estimate is calling for revenue of $3.09 billion, up 18.55% from the prior-year quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $16.24 per share and revenue of $13.04 billion, indicating changes of +16.67% and +18.69%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for ServiceNow. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.62% lower. Right now, ServiceNow possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, ServiceNow is currently exchanging hands at a Forward P/E ratio of 56.71. For comparison, its industry has an average Forward P/E of 25.69, which means ServiceNow is trading at a premium to the group.
It is also worth noting that NOW currently has a PEG ratio of 2.36. 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 industry had an average PEG ratio of 2.52 as trading concluded yesterday.