ServiceNow (NOW) Dips More Than Broader Markets: What You Should Know

ServiceNow (NOW) closed at $370.10 in the latest trading session, marking a -1.84% move from the prior day. This move lagged the S&P 500's daily loss of 1.03%. At the same time, the Dow lost 1.11%, and the tech-heavy Nasdaq gained 0.02%.

Prior to today's trading, shares of the maker of software that automates companies' technology operations had lost 15.21% over the past month. This has lagged the Computer and Technology sector's loss of 13.11% and the S&P 500's loss of 10.4% in that time.

ServiceNow will be looking to display strength as it nears its next earnings release. On that day, ServiceNow is projected to report earnings of $1.85 per share, which would represent year-over-year growth of 19.35%. Our most recent consensus estimate is calling for quarterly revenue of $1.85 billion, up 22.59% from the year-ago period.

NOW's full-year Zacks Consensus Estimates are calling for earnings of $7.31 per share and revenue of $7.31 billion. These results would represent year-over-year changes of +23.48% and +23.97%, respectively.

Any recent changes to analyst estimates for ServiceNow should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. ServiceNow is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ServiceNow currently has a Forward P/E ratio of 51.57. Its industry sports an average Forward P/E of 19.81, so we one might conclude that ServiceNow is trading at a premium comparatively.

It is also worth noting that NOW currently has a PEG ratio of 1.81. 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 industry currently had an average PEG ratio of 1.15 as of yesterday's close.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 142, which puts it in the bottom 44% 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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