ServiceNow (NOW) closed the latest trading day at $1,134.20, indicating a +0.8% change from the previous session’s end. The stock outpaced the S&P 500’s daily gain of 0.53%. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.22%.
The maker of software that automates companies’ technology operations’s shares have seen an increase of 1.77% over the last month, not keeping up with the Computer and Technology sector’s gain of 3.02% and the S&P 500’s gain of 2.69%.
The investment community will be closely monitoring the performance of ServiceNow in its forthcoming earnings report. The company is scheduled to release its earnings on January 29, 2025. The company’s earnings per share (EPS) are projected to be $3.58, reflecting a 15.11% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.96 billion, up 21.3% from the year-ago period.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for ServiceNow. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company’s business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there’s been a 0.93% rise in the Zacks Consensus EPS estimate. ServiceNow is holding a Zacks Rank of #1 (Strong Buy) right now.
From a valuation perspective, ServiceNow is currently exchanging hands at a Forward P/E ratio of 68.56. This expresses a premium compared to the average Forward P/E of 28.3 of its industry.
It is also worth noting that NOW currently has a PEG ratio of 2.78. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. The average PEG ratio for the Computers – IT Services industry stood at 2.69 at the close of the market yesterday.
The Computers – IT Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 48, this industry ranks in the top 20% of all industries, numbering over 250.
Read More: ServiceNow (NOW) Outpaces Stock Market Gains: What You Should Know
