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IBM (IBM) Dips More Than Broader Markets: What You Should Know

·3 min read

IBM (IBM) closed at $126.72 in the latest trading session, marking a -0.84% move from the prior day. This move lagged the S&P 500's daily loss of 0.41%.

Prior to today's trading, shares of the technology and consulting company had lost 3.63% over the past month. This has was narrower than the Computer and Technology sector's loss of 9.08% and the S&P 500's loss of 5.13% in that time.

Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. The company is expected to report EPS of $1.88, down 25.4% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.75 billion, down 21.96% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.47 per share and revenue of $59.9 billion. These totals would mark changes of +19.42% and -15.38%, respectively, from last year.

Any recent changes to analyst estimates for IBM should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, IBM currently has a Forward P/E ratio of 13.5. This represents a no noticeable deviation compared to its industry's average Forward P/E of 13.5.

Also, we should mention that IBM has a PEG ratio of 1.93. 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. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.79 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 212, putting it in the bottom 16% 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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