ServiceNow (NOW) Beats Stock Market Upswing: What Investors Need to Know

ServiceNow (NOW) closed the most recent trading day at $1,072.06, moving +1.41% from the previous trading session. This move outpaced the S&P 500's daily gain of 1%. On the other hand, the Dow registered a gain of 0.78%, and the technology-centric Nasdaq increased by 1.51%.

Coming into today, shares of the maker of software that automates companies' technology operations had lost 1.65% in the past month. In that same time, the Computer and Technology sector lost 4.13%, while the S&P 500 lost 2.14%.

Market participants will be closely following the financial results of ServiceNow in its upcoming release. The company plans to announce its earnings on January 29, 2025. In that report, analysts expect ServiceNow to post earnings of $3.60 per share. This would mark year-over-year growth of 15.76%. Simultaneously, our latest consensus estimate expects the revenue to be $2.96 billion, showing a 21.3% escalation compared to the year-ago quarter.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for ServiceNow. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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.

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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.27% increase. ServiceNow is currently a Zacks Rank #2 (Buy).

In terms of valuation, ServiceNow is presently being traded at a Forward P/E ratio of 64.37. This expresses a premium compared to the average Forward P/E of 27.63 of its industry.

Also, we should mention that NOW has a PEG ratio of 2.61. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. NOW's industry had an average PEG ratio of 2.57 as of yesterday's close.

The Computers - IT Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 48, placing it within the top 20% of over 250 industries.