IBM (IBM) ended the recent trading session at $250.20, demonstrating a -1.24% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.21%. Elsewhere, the Dow saw a downswing of 0.07%, while the tech-heavy Nasdaq appreciated by 0.01%.
The stock of technology and consulting company has fallen by 14.51% in the past month, lagging the Computer and Technology sector's loss of 3.04% and the S&P 500's loss of 2.26%.
Market participants will be closely following the financial results of IBM in its upcoming release. On that day, IBM is projected to report earnings of $1.78 per share, which would represent year-over-year growth of 11.25%. Simultaneously, our latest consensus estimate expects the revenue to be $15.56 billion, showing a 7.04% escalation compared to the year-ago quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.37 per share and revenue of $71.24 billion, indicating changes of +6.73% and +5.49%, respectively, compared to the previous year.
Any recent changes to analyst estimates for IBM should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. IBM is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 20.49 right now. This denotes a discount relative to the industry average Forward P/E of 20.73.
Investors should also note that IBM has a PEG ratio of 2.54 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Computer - Integrated Systems industry had an average PEG ratio of 0.75 as trading concluded yesterday.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 33, putting it in the top 14% 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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