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

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In the latest trading session, IBM (IBM) closed at $135.86, marking a -0.38% move from the previous day. This move lagged the S&P 500's daily loss of 0.09%. Elsewhere, the Dow gained 0.3%, while the tech-heavy Nasdaq lost 0.6%.

Heading into today, shares of the technology and consulting company had gained 11.36% over the past month, outpacing the Computer and Technology sector's loss of 0.46% and the S&P 500's gain of 4.45% 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 $1.66 per share. This would mark a year-over-year decline of 9.78%. Our most recent consensus estimate is calling for quarterly revenue of $17.44 billion, down 0.73% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.17 per share and revenue of $74.38 billion, which would represent changes of +28.84% and +1.03%, respectively, from the prior 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. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. IBM is currently a Zacks Rank #3 (Hold).

In terms of valuation, IBM is currently trading at a Forward P/E ratio of 12.21. This valuation marks a discount compared to its industry's average Forward P/E of 45.37.

Also, we should mention that IBM has a PEG ratio of 1.56. 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. IBM's industry had an average PEG ratio of 1.56 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 208, putting it in the bottom 19% 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.

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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