Back to top

Image: Bigstock

IBM (IBM) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest market close, IBM (IBM - Free Report) reached $162.74, with a +0.31% movement compared to the previous day. The stock's performance was behind the S&P 500's daily gain of 0.45%.

Analysts and investors alike will be keeping a close eye on the performance of IBM in its upcoming earnings disclosure. In that report, analysts expect IBM to post earnings of $3.73 per share. This would mark year-over-year growth of 3.61%. Simultaneously, our latest consensus estimate expects the revenue to be $17.06 billion, showing a 2.21% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.45 per share and revenue of $61.54 billion. These totals would mark changes of +3.5% and +1.67%, respectively, from last 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. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. IBM is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 17.16. This expresses a discount compared to the average Forward P/E of 17.78 of its industry.

Meanwhile, IBM's PEG ratio is currently 4.42. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Computer - Integrated Systems industry had an average PEG ratio of 2.71.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


International Business Machines Corporation (IBM) - free report >>

Published in