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IBM (IBM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

IBM (IBM) closed the most recent trading day at $124.34, moving +0.44% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.15%.

Coming into today, shares of the technology and consulting company had gained 0.52% in the past month. In that same time, the Computer and Technology sector gained 4.54%, while the S&P 500 gained 2.59%.

Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. On that day, IBM is projected to report earnings of $1.77 per share, which would represent a year-over-year decline of 62.42%. Our most recent consensus estimate is calling for quarterly revenue of $20.48 billion, down 5.95% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.73 per share and revenue of $73.77 billion. These totals would mark changes of -31.85% and -4.38%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for IBM. 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.

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.

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. The Zacks Consensus EPS estimate has moved 0.55% lower within the past month. IBM is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, IBM currently has a Forward P/E ratio of 14.19. Its industry sports an average Forward P/E of 28.24, so we one might conclude that IBM is trading at a discount comparatively.

We can also see that IBM currently has a PEG ratio of 4.32. 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. IBM's industry had an average PEG ratio of 2.33 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 207, putting it in the bottom 19% 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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Zacks Investment Research