IBM (IBM) closed at $147.41 in the latest trading session, marking a -0.85% move from the prior day. This change was narrower than the S&P 500’s daily loss of 1.79%. Elsewhere, the Dow lost 1.4%, while the tech-heavy Nasdaq lost 0.41%.
Heading into today, shares of the technology and consulting company had gained 8.55% over the past month, lagging the Computer and Technology sector’s gain of 12.11% and the S&P 500’s gain of 8.6% in that time.
Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. In that report, analysts expect IBM to post earnings of $3.57 per share. This would mark year-over-year growth of 6.57%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.49 billion, down 7.24% from the year-ago period.
IBM’s full-year Zacks Consensus Estimates are calling for earnings of $9.12 per share and revenue of $59.32 billion. These results would represent year-over-year changes of +15.01% and -16.2%, respectively.
It is also important to note the 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Within the past 30 days, our consensus EPS projection remained stagnant. IBM currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 16.3 right now. For comparison, its industry has an average Forward P/E of 16.3, which means IBM is trading at a no noticeable deviation to the group.
Also, we should mention that IBM has a PEG ratio of 2.45. 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. Computer – Integrated Systems stocks are, on average, holding a PEG ratio of 1.9 based on yesterday’s closing prices.
The Computer – Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 218, putting it in the bottom 14% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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