Serve Now (now —— Free report) closed at $645.42 on the latest trading day, an increase of 0.99% from the previous day. This move exceeded the daily decline of 0.58% in the Standard & Poor’s 500 Index.
Entering today, the stock price of the software manufacturer that automates the company’s technical operations has risen 10.14% in the past month. At the same time, the computer and technology sectors rose 2.08%, while the S&P 500 index rose 0.16%.
As NOW is about to release its next earnings, investors will hope to gain power from NOW. The company expects earnings per share of US$1.38, an increase of 14.05% from the same period last year. Our recent consensus estimate requires quarterly revenue of $1.48 billion, an increase of 28.06% over the same period last year.
Throughout the year, our Zacks Consensus Estimate shows that analysts expect earnings per share of $5.80 and revenue of $5.83 billion. These totals will increase by +25.27% and +28.97% respectively over last year.
It is also important to note recent changes in analyst estimates for NOW. These revisions usually reflect the latest short-term business trends, which may change frequently. With this in mind, we can view a positive estimate revision as a sign of optimism about the company’s business prospects.
Our research shows that these estimated changes are directly related to recent stock prices. Investors can take advantage of this by using Zacks Rank. The model takes into account these estimated changes and provides a simple and actionable rating system.
From #1 (strong buy) to #5 (strong sell), the Zacks Rank system has a proven and externally audited outstanding performance record. Since 1988, the average annual return of #1 stock is +25% . In December, the Zacks consensus earnings per share estimate has been higher by 1.61%. NOW now holds Zacks Rank #3 (hold).
Investors should also pay attention to NOW’s current valuation indicators, including its forward price-earnings ratio of 110.23. The industry’s average forward P/E ratio is 36.53, so we may conclude that the transaction price of NOW is relatively high.
In addition, we should mention that NOW’s PEG ratio is 3.91. The PEG ratio is similar to the widely used P/E ratio, but the indicator 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 1.95.
Computer-The IT service industry is part of the computer and technology sector. The industry’s current Zacks industry ranking is 214, which is the bottom 16% of all 250+ industries.
The Zacks Industry Ranking measures the strength of our industry group by measuring the average Zacks ranking of individual stocks in the group. Our research shows that the top 50% of industries perform better than the 2 to 1 in the second half.
Be sure to follow all these stock movement indicators and more on Zacks.com.
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