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IBM (IBM) Gains As Market Dips: What You Should Know

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IBM (IBM - Free Report) closed at $132.63 in the latest trading session, marking a +1.11% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.41%.

Prior to today's trading, shares of the technology and consulting company had gained 2.29% over the past month. This has lagged the Computer and Technology sector's gain of 9.72% and the S&P 500's gain of 5.07% in that time.

IBM will be looking to display strength as it nears its next earnings release. On that day, IBM is projected to report earnings of $1.67 per share, which would represent a year-over-year decline of 9.24%. Our most recent consensus estimate is calling for quarterly revenue of $17.44 billion, down 0.73% from the year-ago period.

IBM's full-year Zacks Consensus Estimates are calling for earnings of $11.15 per share and revenue of $74.35 billion. These results would represent year-over-year changes of +28.6% and +1%, respectively.

Any recent changes to analyst estimates for IBM should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% lower. IBM is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, IBM is holding a Forward P/E ratio of 11.76. This valuation marks a discount compared to its industry's average Forward P/E of 27.36.

Meanwhile, IBM's PEG ratio is currently 1.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IBM's industry had an average PEG ratio of 1.54 as of yesterday's close.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.


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