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

ServiceNow (NOW) closed the most recent trading day at $238.71, moving -0.48% from the previous trading session. This move lagged the S&P 500’s daily gain of 0.3%. Elsewhere, the Dow lost 0.38%, while the tech-heavy Nasdaq added 0.44%.

Heading into today, shares of the maker of software that automates companies’ technology operations had gained 4.74% over the past month, outpacing the Computer and Technology sector’s gain of 4.56% and the S&P 500’s gain of 2.91% in that time.

NOW will be looking to display strength as it nears its next earnings release. In that report, analysts expect NOW to post earnings of $0.55 per share. This would mark a year-over-year decline of 1.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $767.16 million, up 30.2% from the year-ago period.

NOW’s full-year Zacks Consensus Estimates are calling for earnings of $3.12 per share and revenue of $3.42 billion. These results would represent year-over-year changes of +25.3% and +31.25%, respectively.

Investors might also notice recent changes to analyst estimates for NOW. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. NOW is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note NOW’s current valuation metrics, including its Forward P/E ratio of 76.94. This represents a premium compared to its industry’s average Forward P/E of 20.41.

Meanwhile, NOW’s PEG ratio is currently 2.75. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. Computers – IT Services stocks are, on average, holding a PEG ratio of 1.61 based on yesterday’s closing prices.

The Computers – IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Source: Zacks



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