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

ServiceNow (NOW) closed the most recent trading day at $613.11, moving -1.65% from the previous trading session. This change lagged the S&P 500's 0.85% loss on the day. Elsewhere, the Dow lost 0.17%, while the tech-heavy Nasdaq lost 0.05%.

Coming into today, shares of the maker of software that automates companies' technology operations had lost 11.17% in the past month. In that same time, the Computer and Technology sector lost 0.5%, while the S&P 500 lost 0.97%.

Investors will be hoping for strength from ServiceNow as it approaches its next earnings release. On that day, ServiceNow is projected to report earnings of $1.43 per share, which would represent year-over-year growth of 22.22%. Our most recent consensus estimate is calling for quarterly revenue of $1.6 billion, up 28.06% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.93 per share and revenue of $5.88 billion, which would represent changes of +28.08% and +30.13%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for ServiceNow. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ServiceNow is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ServiceNow currently has a Forward P/E ratio of 105.04. This represents a premium compared to its industry's average Forward P/E of 30.06.

It is also worth noting that NOW currently has a PEG ratio of 3.71. 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. NOW's industry had an average PEG ratio of 1.63 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 155, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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