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

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IBM (IBM - Free Report) closed at $124.84 in the latest trading session, marking a +1.4% move from the prior day. This change lagged the S&P 500's 2.12% gain on the day. Elsewhere, the Dow gained 2.13%, while the tech-heavy Nasdaq added 2.64%.

Heading into today, shares of the technology and consulting company had lost 16.38% over the past month, lagging the Computer and Technology sector's loss of 6.28% and the S&P 500's loss of 4.4% in that time.

Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. This is expected to be January 17, 2019. The company is expected to report EPS of $4.86, down 6.18% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $21.77 billion, down 3.45% from the prior-year quarter.

IBM's full-year Zacks Consensus Estimates are calling for earnings of $13.81 per share and revenue of $79.56 billion. These results would represent year-over-year changes of +0.07% and +0.53%, respectively.

Investors might also notice recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% lower. IBM is currently a Zacks Rank #3 (Hold).

Digging into valuation, IBM currently has a Forward P/E ratio of 8.91. For comparison, its industry has an average Forward P/E of 10.15, which means IBM is trading at a discount to the group.

Meanwhile, IBM's PEG ratio is currently 1.79. 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 industry currently had an average PEG ratio of 1.79 as of yesterday's close.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 184, which puts it in the bottom 28% 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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