IBM (IBM) Dips More Than Broader Markets: What You Should Know
IBM (IBM) closed at $125.10 in the latest trading session, marking a -1.66% move from the prior day. This change lagged the S&P 500's 0.63% loss on the day. Elsewhere, the Dow lost 0.55%, while the tech-heavy Nasdaq lost 0.1%.
Heading into today, shares of the technology and consulting company had gained 4.19% over the past month, lagging the Computer and Technology sector's gain of 8.45% and the S&P 500's gain of 5.91% in that time.
IBM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.55, down 4.85% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.51 billion, down 2.87% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.06 per share and revenue of $73.66 billion. These totals would mark changes of -13.66% and -4.52%, respectively, from last year.
Investors should also note any recent changes to analyst estimates 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. IBM is currently a Zacks Rank #3 (Hold).
Looking at its valuation, IBM is holding a Forward P/E ratio of 11.5. Its industry sports an average Forward P/E of 20.54, so we one might conclude that IBM is trading at a discount comparatively.
Also, we should mention that IBM has a PEG ratio of 3.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IBM's industry had an average PEG ratio of 2.66 as of yesterday's close.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
International Business Machines Corporation (IBM): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.