IBM (IBM) ended the recent trading session at $234.75, demonstrating a +0.54% swing from the preceding day's closing price. The stock's performance was ahead of the S&P 500's daily loss of 0.19%. At the same time, the Dow lost 0.55%, and the tech-heavy Nasdaq lost 0.18%.
Heading into today, shares of the technology and consulting company had gained 9.31% over the past month, outpacing the Computer and Technology sector's gain of 7.09% and the S&P 500's gain of 6.66% in that time.
Market participants will be closely following the financial results of IBM in its upcoming release. On that day, IBM is projected to report earnings of $3.76 per share, which would represent a year-over-year decline of 2.84%. Our most recent consensus estimate is calling for quarterly revenue of $17.61 billion, up 1.31% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.12 per share and a revenue of $62.81 billion, representing changes of +5.2% and +1.53%, respectively, from the prior year.
Any recent changes to analyst estimates for IBM should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.08% upward. IBM presently features a Zacks Rank of #3 (Hold).
Looking at its valuation, IBM is holding a Forward P/E ratio of 23.07. For comparison, its industry has an average Forward P/E of 14.88, which means IBM is trading at a premium to the group.
It is also worth noting that IBM currently has a PEG ratio of 5.24. 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. The Computer - Integrated Systems was holding an average PEG ratio of 2.97 at yesterday's closing price.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 79, positioning it in the top 32% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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.
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