IBM (IBM) Outpaces Stock Market Gains: What You Should Know
IBM (IBM) closed the most recent trading day at $145.02, moving +1.7% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.
Heading into today, shares of the technology and consulting company had gained 6.32% over the past month, outpacing the Computer and Technology sector's gain of 2.03% and the S&P 500's gain of 2.25% in that time.
IBM will be looking to display strength as it nears its next earnings release. In that report, analysts expect IBM to post earnings of $2.71 per share. This would mark a year-over-year decline of 20.76%. Our most recent consensus estimate is calling for quarterly revenue of $18.34 billion, down 2.2% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $12.80 per share and revenue of $77.81 billion, which would represent changes of -7.31% and -2.24%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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 has moved 0.04% lower. IBM is currently a Zacks Rank #4 (Sell).
Looking at its valuation, IBM is holding a Forward P/E ratio of 11.14. This valuation marks a discount compared to its industry's average Forward P/E of 11.46.
Also, we should mention that IBM has a PEG ratio of 2.23. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Integrated Systems was holding an average PEG ratio of 2.23 at yesterday's closing price.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 33% 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.
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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.