IBM (IBM) closed at $302.05 in the latest trading session, marking a -1.21% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.14%. Elsewhere, the Dow lost 0.2%, while the tech-heavy Nasdaq lost 0.24%.
Coming into today, shares of the technology and consulting company had gained 0.02% in the past month. In that same time, the Computer and Technology sector gained 0.2%, while the S&P 500 gained 0.94%.
Analysts and investors alike will be keeping a close eye on the performance of IBM in its upcoming earnings disclosure. The company's upcoming EPS is projected at $4.33, signifying a 10.46% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $19.21 billion, showing a 9.45% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $11.39 per share and a revenue of $67.02 billion, representing changes of +10.26% and +6.8%, respectively, from the prior 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. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. IBM is currently sporting a Zacks Rank of #2 (Buy).
With respect to valuation, IBM is currently being traded at a Forward P/E ratio of 26.85. This indicates a premium in contrast to its industry's Forward P/E of 25.05.
One should further note that IBM currently holds a PEG ratio of 3.04. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.11 based on yesterday's closing prices.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 20, putting it in the top 9% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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International Business Machines Corporation (IBM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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