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

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ServiceNow (NOW - Free Report) closed at $467.33 in the latest trading session, marking a -1.83% move from the prior day. This move lagged the S&P 500's daily loss of 0.25%. Meanwhile, the Dow gained 0.24%, and the Nasdaq, a tech-heavy index, lost 1.88%.

Heading into today, shares of the maker of software that automates companies' technology operations had gained 7.02% over the past month, outpacing the Computer and Technology sector's gain of 6.89% and the S&P 500's gain of 1.48% in that time.

Investors will be hoping for strength from ServiceNow as it approaches its next earnings release. In that report, analysts expect ServiceNow to post earnings of $2.02 per share. This would mark year-over-year growth of 16.76%. Meanwhile, our latest consensus estimate is calling for revenue of $2.09 billion, up 21.39% from the prior-year quarter.

NOW's full-year Zacks Consensus Estimates are calling for earnings of $9.15 per share and revenue of $8.85 billion. These results would represent year-over-year changes of +20.55% and +22.2%, respectively.

Any recent changes to analyst estimates for ServiceNow should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.45% higher. ServiceNow is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note ServiceNow's current valuation metrics, including its Forward P/E ratio of 52.01. This valuation marks a premium compared to its industry's average Forward P/E of 22.91.

Meanwhile, NOW's PEG ratio is currently 1.84. 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. The Computers - IT Services was holding an average PEG ratio of 1.4 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 181, which puts it in the bottom 29% 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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