IBM (IBM) closed at $258.69 in the latest trading session, marking a -0.6% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.4%. Elsewhere, the Dow saw an upswing of 0.28%, while the tech-heavy Nasdaq appreciated by 0.39%.
Prior to today's trading, shares of the technology and consulting company had gained 7.62% over the past month. This has lagged the Computer and Technology sector's gain of 11.04% and outpaced the S&P 500's gain of 6.69% in that time.
The investment community will be closely monitoring the performance of IBM in its forthcoming earnings report. In that report, analysts expect IBM to post earnings of $2.64 per share. This would mark year-over-year growth of 8.64%. Simultaneously, our latest consensus estimate expects the revenue to be $16.59 billion, showing a 5.2% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $10.95 per share and a revenue of $66.21 billion, demonstrating changes of +6% and +5.5%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for IBM. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.32% upward. IBM currently has a Zacks Rank of #3 (Hold).
Looking at valuation, IBM is presently trading at a Forward P/E ratio of 23.77. This signifies a premium in comparison to the average Forward P/E of 17.06 for its industry.
We can also see that IBM currently has a PEG ratio of 5.46. 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. As of the close of trade yesterday, the Computer - Integrated Systems industry held an average PEG ratio of 1.86.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 30, this industry ranks in the top 13% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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