In the latest trading session, IBM (IBM - Free Report) closed at $124.15, marking a -0.8% move from the previous day. This change lagged the S&P 500's daily loss of 0.36%. Elsewhere, the Dow lost 0.65%, while the tech-heavy Nasdaq added 0.15%.
IBM will be looking to display strength as it nears its next earnings release. In that report, analysts expect IBM to post earnings of $2.14 per share. This would mark a year-over-year decline of 32.49%. Our most recent consensus estimate is calling for quarterly revenue 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. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Within the past 30 days, our consensus EPS projection remained stagnant. IBM is currently a Zacks Rank #3 (Hold).
Digging into valuation, IBM currently has a Forward P/E ratio of 11.09. For comparison, its industry has an average Forward P/E of 13.44, which means IBM is trading at a discount to the group.
Investors should also note that IBM has a PEG ratio of 3.25 right now. 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. The Computer - Integrated Systems was holding an average PEG ratio of 3.25 at yesterday's closing price.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 96, putting it in the top 38% 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.
To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.