IBM (IBM) closed the most recent trading day at $250.06, moving +1.95% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.78% for the day. Meanwhile, the Dow gained 0.49%, and the Nasdaq, a tech-heavy index, added 1.29%.
The technology and consulting company's stock has dropped by 16.66% in the past month, falling short of the Computer and Technology sector's loss of 3.59% and the S&P 500's loss of 1.33%.
Investors will be eagerly watching for the performance of IBM in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.78, indicating a 11.25% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $15.56 billion, reflecting a 7.04% rise from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.37 per share and a revenue of $71.25 billion, indicating changes of +6.73% and +5.5%, respectively, from the former year.
It's also important for investors to be aware of any recent modifications to analyst estimates for IBM. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.11% increase. IBM is holding a Zacks Rank of #3 (Hold) right now.
With respect to valuation, IBM is currently being traded at a Forward P/E ratio of 19.84. For comparison, its industry has an average Forward P/E of 20.54, which means IBM is trading at a discount to the group.
We can also see that IBM currently has a PEG ratio of 2.46. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computer - Integrated Systems industry held an average PEG ratio of 0.74.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 21, putting it in the top 9% of all 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 ReportThis article originally published on Zacks Investment Research (zacks.com).
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