In the latest trading session, IBM (IBM) closed at $138.84, marking a -0.31% move from the previous day. This change was narrower than the S&P 500’s 0.63% loss on the day. Meanwhile, the Dow lost 0.67%, and the Nasdaq, a tech-heavy index, lost 0.15%.
Coming into today, shares of the technology and consulting company had gained 4.68% in the past month. In that same time, the Computer and Technology sector lost 1.03%, while the S&P 500 gained 0.89%.
Investors will be hoping for strength from IBM as it approaches its next earnings release. On that day, IBM is projected to report earnings of $2.28 per share, which would represent a year-over-year decline of 2.15%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.06 billion, down 19.68% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.89 per share and revenue of $60.99 billion, which would represent changes of +24.72% and -13.84%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. IBM is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 14.08 right now. For comparison, its industry has an average Forward P/E of 13.97, which means IBM is trading at a premium to the group.
Meanwhile, IBM’s PEG ratio is currently 1.56. 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. The Computer – Integrated Systems industry currently had an average PEG ratio of 1.66 as of yesterday’s close.
The Computer – Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 61, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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