ServiceNow (NOW) Gains But Lags Market: What You Should Know
ServiceNow (NOW) closed at $664.22 in the latest trading session, marking a +0.24% move from the prior day.
ServiceNow (NOW) closed at $664.22 in the latest trading session, marking a +0.24% move from the prior day. The stock lagged the S&P 500's daily gain of 1.21%.
Coming into today, shares of the maker of software that automates companies' technology operations had gained 6.69% in the past month. In that same time, the Computer and Technology sector gained 1.28%, while the S&P 500 lost 0.9%.
Wall Street will be looking for positivity from NOW as it approaches its next earnings report date. In that report, analysts expect NOW to post earnings of $1.38 per share. This would mark year-over-year growth of 14.05%. Our most recent consensus estimate is calling for quarterly revenue of $1.48 billion, up 28.06% from the year-ago period.
NOW's full-year Zacks Consensus Estimates are calling for earnings of $5.80 per share and revenue of $5.83 billion. These results would represent year-over-year changes of +25.27% and +28.97%, respectively.
Any recent changes to analyst estimates for NOW should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.52% higher. NOW is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, NOW currently has a Forward P/E ratio of 114.3. This valuation marks a premium compared to its industry's average Forward P/E of 34.36.
Meanwhile, NOW's PEG ratio is currently 4.06. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computers - IT Services stocks are, on average, holding a PEG ratio of 1.96 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 217, which puts it in the bottom 15% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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