ServiceNow (NOW) closed at $460.12 on the most recent trading day, an increase of -0.08% from the previous trading day. The move lags behind the daily increase of 0.3% in the Standard & Poor’s 500 Index. At the same time, the Dow Jones Industrial Average rose 0.2%, and the high-tech Nasdaq Index rose 0.37%.
Prior to today’s transaction, the company’s stock price of a software maker that automates technological operations had fallen 5.58% in the past month. In the same period, the computer and technology industries lost 5.52%, while the S&P 500 lost 5.02%.
Now, it will show its strength the next time it releases earnings. The company expects earnings per share of $1.04, an increase of 5.05% from the same period last year. Our recent consensus estimate is that quarterly revenue was $1.11 billion, an increase of 25.34% over the same period last year.
NOW’s full-year Zacks Consensus Estimates report calls for earnings per share of $4.45 and revenue of $4.41 billion. These results will represent year-on-year changes of +34.04% and +27.38%, respectively.
It is also important to note the latest changes in analyst estimates for NOW. These revisions help to show the changing nature of recent business trends. Therefore, the positive estimate revision reflects the analyst’s optimism about the company’s business and profitability.
Our research shows that these estimated changes are directly related to recent stock prices. Investors can use the Zacks ranking to take advantage of this. The model takes into account the changes in these estimates and provides a simple and feasible rating system.
The Zacks Rank system ranks from #1 (strongly buy) to #5 (strongly sell). It has an excellent record of successful external audits, with an average annual return of +25% for the number one stock since 1988. Now, Zacks ranks #3 (hold).
Judging from its valuation, NOW’s expected price-to-earnings ratio is now 103.5. In contrast, the industry’s average forward P/E ratio is 27.04, which means that NOW’s transaction price is higher than that of the group.
Investors should also note that the PEG ratio of NOW is now 3.58. 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. The average PEG ratio calculated by the computer-IT service based on yesterday’s closing price was 2.32.
The computer-IT service industry belongs to the computer and technology industry. The industry currently ranks 126 in the Zacks Industry Ranking, ranking in the top 50% of all 250+ industries.
The Zacks Industry Ranking includes the average Zacks Rank of companies in each industry listed in order from best to worst. 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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