IBM (IBM) closed the most recent trading day at $145.29, moving -1.06% from the previous trading session. This move lagged the S&P 500’s daily gain of 0.23%.
Heading into today, shares of the technology and consulting company had gained 2.16% over the past month, lagging the Computer and Technology sector’s gain of 5.66% and the S&P 500’s gain of 2.34% 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 $2.25 per share. This would mark year-over-year growth of 3.21%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.24 billion, up 0.66% from the year-ago period.
IBM’s full-year Zacks Consensus Estimates are calling for earnings of $10.86 per share and revenue of $74.23 billion. These results would represent year-over-year changes of +25.26% and +0.82%, respectively.
It is also important to note the recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. IBM currently has a Zacks Rank of #3 (Hold).
Investors should also note IBM’s current valuation metrics, including its Forward P/E ratio of 13.52. This valuation marks a discount compared to its industry’s average Forward P/E of 30.64.
It is also worth noting that IBM currently has a PEG ratio of 1.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Computer – Integrated Systems industry currently had an average PEG ratio of 1.86 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 240, which puts it in the bottom 6% of all 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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