In the latest market close, IBM (IBM) reached $251.35, with a -0.73% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 1.12%. Elsewhere, the Dow saw an upswing of 1.14%, while the tech-heavy Nasdaq appreciated by 1.46%.
Heading into today, shares of the technology and consulting company had lost 4.25% over the past month, outpacing the Computer and Technology sector's loss of 7.5% and lagging the S&P 500's loss of 4.13% in that time.
The investment community will be paying close attention to the earnings performance of IBM in its upcoming release. The company is forecasted to report an EPS of $1.43, showcasing a 14.88% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $14.44 billion, down 0.18% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $10.78 per share and a revenue of $64.85 billion, indicating changes of +4.36% and +3.34%, respectively, from the former year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for IBM. These latest adjustments often mirror the shifting dynamics of short-term business patterns. 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. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.04% rise in the Zacks Consensus EPS estimate. Right now, IBM possesses a Zacks Rank of #2 (Buy).
In the context of valuation, IBM is at present trading with a Forward P/E ratio of 23.48. This represents a premium compared to its industry's average Forward P/E of 14.77.
Meanwhile, IBM's PEG ratio is currently 5.55. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Computer - Integrated Systems industry was having an average PEG ratio of 1.5.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 68, putting it in the top 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Zacks Names #1 Semiconductor Stock
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This article originally published on Zacks Investment Research (zacks.com).
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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