IBM (IBM) closed at $221.93 in the latest trading session, marking a -0.64% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.73%. Meanwhile, the Dow experienced a rise of 0.16%, and the technology-dominated Nasdaq saw an increase of 0.98%.
Prior to today's trading, shares of the technology and consulting company had gained 0.17% over the past month. This has lagged the Computer and Technology sector's gain of 3.28% and the S&P 500's gain of 0.34% in that time.
The upcoming earnings release of IBM will be of great interest to investors. The company's earnings report is expected on January 29, 2025. In that report, analysts expect IBM to post earnings of $3.74 per share. This would mark a year-over-year decline of 3.36%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.6 billion, up 1.26% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $10.12 per share and revenue of $62.8 billion, indicating changes of +5.2% and +1.52%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for IBM. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Within the past 30 days, our consensus EPS projection remained stagnant. 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 22.07. This valuation marks a premium compared to its industry's average Forward P/E of 14.11.
It's also important to note that IBM currently trades at a PEG ratio of 5.01. 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 was holding an average PEG ratio of 1.77 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 68, positioning it in the top 28% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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