In the latest trading session, IBM (IBM) closed at $145.72, marking a +1.06% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.15%.
Prior to today’s trading, shares of the technology and consulting company had lost 1.07% over the past month. This has lagged the Computer and Technology sector’s loss of 0.49% and the S&P 500’s gain of 0.58% 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%. Our most recent consensus estimate is calling for quarterly revenue 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 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.
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 holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, IBM is currently trading at a Forward P/E ratio of 13.27. This valuation marks a discount compared to its industry’s average Forward P/E of 32.73.
It is also worth noting that IBM currently has a PEG ratio of 1.65. 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. Computer – Integrated Systems stocks are, on average, holding a PEG ratio of 1.92 based on yesterday’s closing prices.
The Computer – Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 250, which puts it in the bottom 2% 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
To read this article on Zacks.com click here.