Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a post-market leader 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 $57.9 million.
- NOW is up 3% today from today's close.
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More details on NOW:
ServiceNow, Inc. provides cloud-based services to automate enterprise IT operations primarily in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. Currently there are 15 analysts that rate ServiceNow a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for ServiceNow has been 944,800 shares per day over the past 30 days. ServiceNow has a market cap of $10.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.78 and a short float of 4.8% with 5.27 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Tuesday.
rates ServiceNow as a
. 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 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 179.0% when compared to the same quarter one year ago, falling from -$14.71 million to -$41.05 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.
- The debt-to-equity ratio of 1.05 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, NOW has managed to keep a strong quick ratio of 1.81, which demonstrates the ability to cover short-term cash needs.
- 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 year. 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 -$0.54 versus -$0.31 in the prior year. This year, the market expects an improvement in earnings (-$0.09 versus -$0.54).
- Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full ServiceNow Ratings Report.