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

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In the latest market close, ServiceNow (NOW - Free Report) reached $835.40, with a +0.07% movement compared to the previous day. This move outpaced the S&P 500's daily loss of 0.3%. Meanwhile, the Dow lost 0.54%, and the Nasdaq, a tech-heavy index, added 0.25%.

Shares of the maker of software that automates companies' technology operations have appreciated by 7.54% over the course of the past month, outperforming the Computer and Technology sector's gain of 1.22% and the S&P 500's gain of 3.42%.

Investors will be eagerly watching for the performance of ServiceNow in its upcoming earnings disclosure. The company is predicted to post an EPS of $3.46, indicating a 18.49% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.74 billion, indicating a 19.78% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $13.75 per share and revenue of $10.9 billion, which would represent changes of +27.55% and +21.51%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for ServiceNow. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, there's been no change in the Zacks Consensus EPS estimate. As of now, ServiceNow holds a Zacks Rank of #2 (Buy).

Investors should also note ServiceNow's current valuation metrics, including its Forward P/E ratio of 60.72. This signifies a premium in comparison to the average Forward P/E of 27.17 for its industry.

We can additionally observe that NOW currently boasts a PEG ratio of 2.47. 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 average PEG ratio for the Computers - IT Services industry stood at 3 at the close of the market yesterday.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 69, finds itself in the top 28% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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