IBM (IBM Quick QuoteIBM - Free Report) shares ended the last trading session 3.8% higher at $138.16. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 3.6% gain over the past four weeks.

The increase in share price can be attributed to better-than-expected first-quarter 2021 results and year-over-year growth witnessed in the top line.

IBM reported first-quarter 2021 non-GAAP earnings of $1.77 per share, which surpassed the Zacks Consensus Estimate by 6%. Revenues of $17.7 billion beat the Zacks Consensus Estimate by 1.7%. The top line also improved 1% (as reported) on a year-over-year basis driven by strength in the company’s hybrid cloud business.

Markedly, revenues from Red Hat, in the first quarter increased 17% (up 15% at cc) on a normalized basis, driven by strong uptake of Red Hat Enterprise Linux and OpenShift platform. Currently, more than 3,000 clients are using Red Hat and IBM’s hybrid cloud platform.

Price and Consensus

This technology and consulting company is expected to post quarterly earnings of $2.43 per share in its upcoming report, which represents a year-over-year change of +11.5%. Revenues are expected to be $18.25 billion, up 0.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For IBM, the consensus EPS estimate for the quarter has been revised 1.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on IBM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>