ServiceNow (NOW) closed at $518.30 on the last trading day, an increase of 1.81% from the previous trading day. This change exceeds the 0.63% loss of the S&P 500 that day. Elsewhere, the Dow fell 0.55%, while the high-tech Nasdaq fell 0.1%.
Entering today, the stock price of software manufacturers in the automation company’s technology business has risen 11.14% in the past month, surpassing the computer and technology industry’s 8.45% increase and the S&P 500’s 5.91% increase at that time.
Investors will want to gain power from NOW because NOW is about to announce its next earnings release date (expected to be October 28, 2020). The company expects to report earnings per share of $1.03, an increase of 4.04% from the same period last year. At the same time, our latest consensus estimates that required revenue is $1.11 billion, an increase of 25.34% over the same period last year.
For the full year, our Zacks Consensus Estimates projected earnings per share of $4.43 and revenue of $4.41 billion, representing an increase of +33.43% and +27.38% over the previous year.
It is also important to note the latest changes in analyst estimates for NOW. Recent revisions tend to reflect the latest recent business trends. Therefore, we can interpret the positive estimate revision as a good sign of the company’s business prospects.
Based on our research, we believe that these estimate revisions are directly related to changes in near-team inventory. To benefit from this, we developed the Zacks Rank, a proprietary model that takes into account these estimated changes and provides a viable rating system.
The Zacks Rank system ranks from No. 1 (Strong Buy) to No. 5 (Strong Sell) and has a recognized external audit performance record. Since 1988, the average number one stock has risen by an average of 25% per year. The Zacks Consensus EPS estimate has stagnated over the past month. Now, his Zacks Rank is 3 (hold).
In terms of valuation, NOW currently trades at a P/E ratio of 114.8. Compared to its industry average forward P/E ratio of 29.42, this is a premium.
Investors should also note that the PEG value of NOW is now 3.97. The PEG ratio is similar to the widely used P/E ratio, but this metric also takes into account the company’s expected earnings growth rate. As of yesterday’s close, the current average PEG ratio for the computer-IT service industry is 2.56.
The computer-IT service industry belongs to the computer and technology industry. The group’s Zacks Industry Rank is 184, which is the bottom 28% of all 250+ industries.
The Zacks Industry Ranking measures the strength of our various industry groups by measuring the average Zacks ranking of individual stocks in the group. Our research shows that the top 50% of industries are two to one times higher than those in the second half.
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ServiceNow, Inc. (NOW): Free inventory analysis report
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