IBM (IBM) closed at $122.07 in the latest trading session, marking a -1.49% move from the prior day. This change was narrower than the S&P 500’s 1.84% loss on the day. Meanwhile, the Dow lost 1.38%, and the Nasdaq, a tech-heavy index, lost 0.38%.
Coming into today, shares of the technology and consulting company had lost 8.95% in the past month. In that same time, the Computer and Technology sector lost 3.8%, while the S&P 500 lost 1.96%.
Investors will be hoping for strength from IBM as it approaches its next earnings release. In that report, analysts expect IBM to post earnings of $1.35 per share. This would mark a year-over-year decline of 23.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.78 billion, down 16.63% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.09 per share and revenue of $63.56 billion. These totals would mark changes of +27.24% and -10.2%, respectively, from last year.
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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 9.3% lower within the past month. IBM is currently a Zacks Rank #4 (Sell).
Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 12.28 right now. This valuation marks a discount compared to its industry’s average Forward P/E of 16.84.
It is also worth noting that IBM currently has a PEG ratio of 1.14. 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. IBM’s industry had an average PEG ratio of 1.44 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 237, which puts it in the bottom 7% 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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