ServiceNow (NOW) closed at $ 458.65 in the most recent trading session, marking a +0.74% move from the previous day. This move exceeds the S&P 500’s daily loss of 0.13%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.14%.
Prior to today’s trade, the shares of software maker that automates the company’s technology operations gained 8.49% in the past month. It surpassed the Computer and Technology sector’s loss of 2.49% and the S&P 500’s loss of 3.32% during that period.
Investors will expect strength from ServiceNow as it approaches its next earnings release. On that day, ServiceNow is expected to report revenues of $ 1.54 per share, which will represent year-over-year growth of 8.45%. Our latest consensus estimate calls for quarterly revenue of $ 1.77 billion, up 25.45% from the previous year.
Looking at the full year, our Zacks Consensus Estimates suggests that analysts expect revenues of $ 7.31 per share and revenue of $ 7.42 billion. These totals will mark changes of +23.48% and +25.94%, respectively, from last year.
Any recent changes in analyst estimates for ServiceNow should also be kept in mind by investors. These changes typically reflect the latest short -term business trends, which can change frequently. With this in mind, we can consider positive changes in the estimate as a sign of optimism about the company’s business outlook.
Research indicates that these changes in estimates are directly related to near -term share price momentum. To benefit from this, we developed Zacks Rank, a proprietary model that takes these changes in estimation and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive out-audited track record of outperformance, with #1 stocks generating average annual earnings that +25% since 1988. Over last month, the Zacks Consensus EPS estimate moved 4.25% lower. ServiceNow is currently Zacks Rank #3 (Hold).
Looking at its valuation, ServiceNow holds a Forward P/E ratio of 62.25. Its industry is boosting its Forward P/E average of 17.68, so we can assume that ServiceNow is trading at a premium.
It should also be noted that NOW currently has a PEG ratio of 2.18. This popular metric is similar to the known P/E ratio, with the difference that the PEG ratio also takes into account the company’s expected revenue growth rate. Computers – IT Services stocks, on average, have a PEG ratio of 0.8 based on yesterday’s closing prices.
The Computers – IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 167, which places it at the lowest 34% of all 250+ industries.
Zacks Industry Rank measures the strength of our industry groups by measuring the average Zacks Rank of individual stocks within groups. Our research shows that the top 50% rated industries perform more in the lower half by a factor of 2 to 1.
To follow NOW on upcoming trading sessions, be sure to use Zacks.com.
Want the latest recommendations from Zacks Investment Research? Now, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.