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IBM (IBM) Outpaces Stock Market Gains: What You Should Know

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IBM (IBM - Free Report) closed the most recent trading day at $143.04, moving +0.65% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.35%. At the same time, the Dow added 0.03%, and the tech-heavy Nasdaq gained 0.7%.

Heading into today, shares of the technology and consulting company had gained 2.77% over the past month, lagging the Computer and Technology sector's gain of 6.69% and the S&P 500's gain of 5.14% 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 April 16, 2019. The company is expected to report EPS of $2.22, down 9.39% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.65 billion, down 2.2% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $13.91 per share and revenue of $78.13 billion, which would represent changes of +0.72% and -1.84%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. IBM is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, IBM is currently trading at a Forward P/E ratio of 10.21. This valuation marks a discount compared to its industry's average Forward P/E of 10.22.

Also, we should mention that IBM has a PEG ratio of 2.52. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 2.52 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 33, putting it in the top 13% 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.

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




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