Trade-Ideas LLC identified

ServiceNow

(

NOW

) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified ServiceNow as such a stock due to the following factors:

  • NOW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.8 million.
  • NOW is down 5.4% today from today's close.

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More details on NOW:

ServiceNow, Inc. provides enterprise cloud-based solutions that define, structure, manage, and automate services in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. Currently there are 17 analysts that rate ServiceNow a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for ServiceNow has been 1.5 million shares per day over the past 30 days. ServiceNow has a market cap of $12.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.50 and a short float of 7.2% with 7.10 days to cover. Shares are down 15.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates ServiceNow as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 473.8% when compared to the same quarter one year ago, falling from -$58.09 million to -$333.33 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, SERVICENOW INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.60 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, NOW's quick ratio is somewhat strong at 1.04, demonstrating the ability to handle short-term liquidity needs.
  • The share price of SERVICENOW INC has not done very well: it is down 9.58% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • SERVICENOW INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SERVICENOW INC reported poor results of -$1.27 versus -$1.23 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus -$1.27).

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