In the latest trading session, IBM (IBM) closed at $146.36, marking a -0.2% move from the previous day. This change lagged the S&P 500’s daily gain of 0.51%.
Heading into today, shares of the technology and consulting company had gained 1.33% over the past month, lagging the Computer and Technology sector’s gain of 6.2% and the S&P 500’s gain of 1.75% in that time.
Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. In that report, analysts expect IBM to post earnings of $2.25 per share. This would mark year-over-year growth of 3.21%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.24 billion, up 0.66% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.86 per share and revenue of $74.23 billion. These totals would mark changes of +25.26% and +0.82%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 is currently a Zacks Rank #3 (Hold).
Digging into valuation, IBM currently has a Forward P/E ratio of 13.5. This represents a discount compared to its industry’s average Forward P/E of 31.95.
It is also worth noting that IBM currently has a PEG ratio of 1.68. 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. The Computer – Integrated Systems industry currently had an average PEG ratio of 1.91 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 240, putting it in the bottom 6% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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