IBM (IBM - Free Report) closed at $119.12 in the latest trading session, marking a -1.86% move from the prior day. This change lagged the S&P 500's daily loss of 0.78%. Meanwhile, the Dow lost 0.41%, and the Nasdaq, a tech-heavy index, lost 0.97%.
IBM will be looking to display strength as it nears its next earnings release. On that day, IBM is projected to report earnings of $2.14 per share, which would represent a year-over-year decline of 32.49%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.72 billion, down 7.52% from the year-ago period.
IBM's full-year Zacks Consensus Estimates are calling for earnings of $11.29 per share and revenue of $72.98 billion. These results would represent year-over-year changes of -11.87% and -5.4%, respectively.
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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. The Zacks Consensus EPS estimate has moved 3.37% lower 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 10.75. For comparison, its industry has an average Forward P/E of 11.16, which means IBM is trading at a discount to the group.
Investors should also note that IBM has a PEG ratio of 3.15 right now. 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. IBM's industry had an average PEG ratio of 3.15 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 67, which puts it in the top 27% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.