IBM (IBM) Dips More Than Broader Markets: What You Should Know
IBM (IBM) closed the most recent trading day at $129.87, moving -1.52% from the previous trading session. This change lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow lost 1.04%, while the tech-heavy Nasdaq added 0.67%.
IBM will be looking to display strength as it nears its next earnings release. In that report, analysts expect IBM to post earnings of $2.14 per share. This would mark a year-over-year decline of 32.49%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.72 billion, down 7.52% from the year-ago period.
IBM's full-year Zacks Consensus Estimates are calling for earnings of $11.29 per share and revenue of $72.98 billion. These results would represent year-over-year changes of -11.87% and -5.4%, respectively.
Investors should also note any 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 11.68 right now. This valuation marks a discount compared to its industry's average Forward P/E of 14.88.
It is also worth noting that IBM currently has a PEG ratio of 3.43. 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 3.43 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 90, which puts it in the top 36% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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