In the latest trading session, IBM (IBM) closed at $136.22, marking a -1.4% move from the previous day. This change lagged the S&P 500's daily loss of 0.58%.
Coming into today, shares of the technology and consulting company had lost 3.79% in the past month. In that same time, the Computer and Technology sector gained 2.08%, while the S&P 500 gained 0.16%.
IBM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.48, down 3.88% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.74 billion, up 1.03% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.82 per share and revenue of $74.93 billion. These totals would mark changes of +24.8% and +1.77%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.17% lower. 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 12.77. For comparison, its industry has an average Forward P/E of 24.58, which means IBM is trading at a discount to the group.
Meanwhile, IBM's PEG ratio is currently 1.57. 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. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.61 based on yesterday's closing prices.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 127, which puts it in the top 50% 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.
To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.
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