IBM (IBM) Suffers a Larger Drop Than the General Market: Key Insights

The latest trading session saw IBM (IBM) ending at $170.67, denoting a -1.74% adjustment from its last day's close. The stock's change was less than the S&P 500's daily loss of 0.74%. Elsewhere, the Dow lost 1.53%, while the tech-heavy Nasdaq lost 0.39%.

Heading into today, shares of the technology and consulting company had lost 5.65% over the past month, lagging the Computer and Technology sector's gain of 10.43% and the S&P 500's gain of 6.06% in that time.

The upcoming earnings release of IBM will be of great interest to investors. The company's upcoming EPS is projected at $2.17, signifying a 0.46% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $15.58 billion, indicating a 0.67% increase compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $9.91 per share and revenue of $63.04 billion, indicating changes of +3.01% and +1.91%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 last 30 days, the Zacks Consensus EPS estimate has moved 1.25% lower. Right now, IBM possesses a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 17.52 right now. This valuation marks no noticeable deviation compared to its industry's average Forward P/E of 17.52.

Also, we should mention that IBM has a PEG ratio of 4.28. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 2.51 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 90, placing it within the top 36% of over 250 industries.

The Zacks Industry Rank gauges the strength of our 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming 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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