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ServiceNow (NOW) Stock Sinks As Market Gains: What You Should Know

ServiceNow (NOW) closed the most recent trading day at $265.65, moving -0.62% from the previous trading session. This change lagged the S&P 500's 0.86% gain on the day. Meanwhile, the Dow gained 0.79%, and the Nasdaq, a tech-heavy index, added 0.73%.

Coming into today, shares of the maker of software that automates companies' technology operations had gained 5.26% in the past month. In that same time, the Computer and Technology sector gained 1.97%, while the S&P 500 gained 1.94%.

Wall Street will be looking for positivity from NOW as it approaches its next earnings report date. On that day, NOW is projected to report earnings of $0.88 per share, which would represent year-over-year growth of 14.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $942.59 million, up 31.75% from the year-ago period.

NOW's full-year Zacks Consensus Estimates are calling for earnings of $3.24 per share and revenue of $3.45 billion. These results would represent year-over-year changes of +30.12% and +32.29%, respectively.

Investors might also notice recent changes to analyst estimates for NOW. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. NOW is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, NOW currently has a Forward P/E ratio of 82.54. This valuation marks a premium compared to its industry's average Forward P/E of 20.59.

It is also worth noting that NOW currently has a PEG ratio of 2.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computers - IT Services was holding an average PEG ratio of 1.94 at yesterday's closing price.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow NOW in the coming trading sessions, be sure to utilize Zacks.com.


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