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

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IBM (IBM - Free Report) closed the most recent trading day at $146.49, moving +0.21% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.16%. Meanwhile, the Dow gained 0.01%, and the Nasdaq, a tech-heavy index, lost 0.02%.

Coming into today, shares of the technology and consulting company had gained 5.71% in the past month. In that same time, the Computer and Technology sector gained 1.27%, while the S&P 500 gained 1.83%.

Investors will be hoping for strength from IBM as it approaches its next earnings release. On that day, IBM is projected to report earnings of $3.57 per share, which would represent year-over-year growth of 6.57%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.49 billion, down 7.24% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.12 per share and revenue of $59.32 billion. These totals would mark changes of +15.01% and -16.2%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. IBM currently has a Zacks Rank of #3 (Hold).

Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 16.03. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 16.03.

It is also worth noting that IBM currently has a PEG ratio of 2.41. 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. The Computer - Integrated Systems was holding an average PEG ratio of 2.09 at yesterday's closing price.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 205, which puts it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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