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

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ServiceNow (NOW - Free Report) closed at $444.75 in the latest trading session, marking a +0.99% move from the prior day. This move outpaced the S&P 500's daily loss of 0.38%. At the same time, the Dow lost 0.5%, and the tech-heavy Nasdaq lost 0.5%.

Coming into today, shares of the maker of software that automates companies' technology operations had gained 1.72% in the past month. In that same time, the Computer and Technology sector lost 8.38%, while the S&P 500 lost 6.69%.

ServiceNow will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.54, up 8.45% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.77 billion, up 25.45% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.31 per share and revenue of $7.42 billion. These totals would mark changes of +23.48% and +25.94%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ServiceNow. These revisions help to show the ever-changing nature of 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 4.25% lower. ServiceNow is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ServiceNow is holding a Forward P/E ratio of 60.21. This valuation marks a premium compared to its industry's average Forward P/E of 17.69.

It is also worth noting that NOW currently has a PEG ratio of 2.11. 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 0.84 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 150, which puts it in the bottom 41% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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