IBM (IBM) Outpaces Stock Market Gains: What You Should Know
IBM (IBM) closed the most recent trading day at $124.65, moving +0.39% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.17%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq lost 0.34%.
Coming into today, shares of the technology and consulting company had lost 0.92% in the past month. In that same time, the Computer and Technology sector gained 13.74%, while the S&P 500 gained 8.34%.
IBM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.54, down 5.22% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $17.76 billion, down 1.47% from the prior-year quarter.
IBM's full-year Zacks Consensus Estimates are calling for earnings of $11.08 per share and revenue of $73.73 billion. These results would represent year-over-year changes of -13.51% and -4.43%, respectively.
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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. IBM is holding a Zacks Rank of #4 (Sell) right now.
In terms of valuation, IBM is currently trading at a Forward P/E ratio of 11.21. This represents a discount compared to its industry's average Forward P/E of 21.16.
It is also worth noting that IBM currently has a PEG ratio of 3.42. 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. The Computer - Integrated Systems was holding an average PEG ratio of 2.88 at yesterday's closing price.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 99, which puts it in the top 39% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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