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IBM (IBM) Rises As Market Takes a Dip: Key Facts

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IBM (IBM - Free Report) closed the latest trading day at $189.82, indicating a +0.36% change from the previous session's end. The stock's performance was ahead of the S&P 500's daily loss of 0.04%. On the other hand, the Dow registered a loss of 0.03%, and the technology-centric Nasdaq increased by 0.03%.

The technology and consulting company's stock has dropped by 3.48% in the past month, falling short of the Computer and Technology sector's gain of 4.26% and the S&P 500's gain of 2.57%.

The investment community will be closely monitoring the performance of IBM in its forthcoming earnings report. The company's upcoming EPS is projected at $1.59, signifying a 16.91% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $14.56 billion, indicating a 2.18% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $10.07 per share and revenue of $63.79 billion, which would represent changes of +4.68% and +3.12%, respectively, from the prior year.

It is also important to note the 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.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, IBM possesses a Zacks Rank of #2 (Buy).

With respect to valuation, IBM is currently being traded at a Forward P/E ratio of 18.79. This expresses a premium compared to the average Forward P/E of 17.05 of its industry.

Also, we should mention that IBM has a PEG ratio of 3.71. 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. As the market closed yesterday, the Computer - Integrated Systems industry was having an average PEG ratio of 2.53.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 66, finds itself in the top 27% echelons 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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