IBM (IBM) Rises But Trails Market: What Investors Should Know
IBM (IBM) closed the most recent trading day at $196.54, moving +0.19% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 1.03%. Meanwhile, the Dow experienced a rise of 0.34%, and the technology-dominated Nasdaq saw an increase of 1.51%.
Heading into today, shares of the technology and consulting company had gained 6.76% over the past month, outpacing the Computer and Technology sector's gain of 2.52% and the S&P 500's gain of 3.21% in that time.
The investment community will be paying close attention to the earnings performance of IBM in its upcoming release. The company is predicted to post an EPS of $1.59, indicating a 16.91% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $14.56 billion, reflecting a 2.18% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.07 per share and a revenue of $63.79 billion, representing changes of +4.68% and +3.12%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for IBM. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.3% increase. IBM currently has a Zacks Rank of #3 (Hold).
In the context of valuation, IBM is at present trading with a Forward P/E ratio of 19.49. This expresses a premium compared to the average Forward P/E of 17.8 of its industry.
One should further note that IBM currently holds a PEG ratio of 3.84. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Computer - Integrated Systems industry had an average PEG ratio of 2.66.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 182, placing it within the bottom 28% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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International Business Machines Corporation (IBM) : Free Stock Analysis Report
