Service Today (NOW – Free Report) closed at $360.67 in the latest trading session, marking a +1.24% move from the previous day. The stock trailed the S&P 500’s daily gain of 2.37%. At the same time, the Dow added 2.47%, and the tech-heavy Nasdaq lost 0.07%.
Before today’s trading, shares of the software maker that automates companies’ technology operations had lost 7.94% in the past month. It trailed the Computer & Technology sector’s loss of 5.85% and the S&P 500’s loss of 4.82% during that period.
Investors will be expecting strength from ServiceNow as it approaches its next earnings release, which is expected on October 26, 2022. The company is expected to report EPS of $1.85, up 19.35% from the prior year quarter. Our latest consensus estimate calls for quarterly revenue of $1.85 billion, up 22.66% from a year ago.
For the full year, our Zacks Consensus Estimates forecast earnings of $7.31 per share and revenue of $7.31 billion, representing changes of +23.48% and +24.01%, respectively, from last year.
Any recent changes in analyst estimates for ServiceNow should also be noted by investors. Recent changes tend to reflect the latest business trends close to the time. With this in mind, we can consider positive estimate changes as a sign of optimism about the company’s business outlook.
Research indicates that these estimate changes are directly related to near-term share price momentum. Investors can take advantage of this by using the Zacks Rank. This model takes these estimation changes into account and provides a simple and 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 returns of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.16% lower over the past month. ServiceNow currently holds a Zacks Rank of #3 (Hold).
Investors should also note ServiceNow’s current valuation metrics, including its Forward P/E ratio of 48.75. This represents a premium compared to its industry average Forward P/E of 21.96.
Investors should also note that NOW has a PEG ratio of 1.71 at the moment. This metric is used similarly to the popular P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The NOW industry has an average PEG ratio of 1.18 as of yesterday’s close.
The Computers – IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 87, placing it in the top 35% of all 250+ industries.
The Zacks Industry Rank measures the strength of our industry groups by measuring the average Zacks Rank of individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow NOW on the upcoming trading sessions, be sure to use Zacks.com.