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IBM (IBM) Stock Sinks As Market Gains: What You Should Know

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IBM (IBM - Free Report) closed at $134.21 in the latest trading session, marking a -0.41% move from the prior day. This change lagged the S&P 500's daily gain of 0.08%. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq lost 4.81%.

Coming into today, shares of the technology and consulting company had gained 5.35% in the past month. In that same time, the Computer and Technology sector lost 2.99%, while the S&P 500 gained 0.64%.

Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. This is expected to be January 24, 2022. On that day, IBM is projected to report earnings of $3.51 per share, which would represent year-over-year growth of 69.57%. Our most recent consensus estimate is calling for quarterly revenue of $17.57 billion, down 13.74% from the year-ago period.

Investors might also notice recent changes to analyst estimates for IBM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate has moved 1.84% lower within the past month. IBM currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that IBM has a Forward P/E ratio of 12.06 right now. Its industry sports an average Forward P/E of 16.53, so we one might conclude that IBM is trading at a discount comparatively.

Also, we should mention that IBM has a PEG ratio of 2.03. 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. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.73 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 51, which puts it in the top 20% 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.

To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.


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