IBM (IBM) Dips More Than Broader Market: What You Should Know

The latest trading session saw IBM (IBM) ending at $165.63, denoting a -0.85% adjustment from its last day's close. The stock's change was less than the S&P 500's daily loss of 0.6%. Meanwhile, the Dow experienced a drop of 0.86%, and the technology-dominated Nasdaq saw a decrease of 1.08%.

The technology and consulting company's stock has climbed by 1.59% in the past month, falling short of the Computer and Technology sector's gain of 7.76% and the S&P 500's gain of 3.15%.

Analysts and investors alike will be keeping a close eye on the performance of IBM in its upcoming earnings disclosure. The company's earnings report is set to go public on July 24, 2024. The company's earnings per share (EPS) are projected to be $2.17, reflecting a 0.46% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $15.58 billion, up 0.67% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $9.91 per share and a revenue of $63.04 billion, indicating changes of +3.01% and +1.91%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.11% decrease. IBM presently features a Zacks Rank of #3 (Hold).

Digging into valuation, IBM currently has a Forward P/E ratio of 16.85. This valuation marks no noticeable deviation compared to its industry's average Forward P/E of 16.85.

Meanwhile, IBM's PEG ratio is currently 4.12. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Computer - Integrated Systems industry stood at 2.51 at the close of the market yesterday.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 77, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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