IBM (IBM) Stock Sinks As Market Gains: What You Should Know
IBM (IBM) closed the most recent trading day at $150.03, moving -0.83% from the previous trading session. This change lagged the S&P 500's daily gain of 0.18%.
Prior to today's trading, shares of the technology and consulting company had gained 4.56% over the past month. This has lagged the Computer and Technology sector's gain of 6.46% and outpaced the S&P 500's gain of 2.43% in that time.
IBM will be looking to display strength as it nears its next earnings release. In that report, analysts expect IBM to post earnings of $2.25 per share. This would mark year-over-year growth of 3.21%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.24 billion, up 0.66% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $10.86 per share and revenue of $74.23 billion, which would represent changes of +25.26% and +0.82%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for IBM. These revisions help to show the ever-changing nature of near-term business trends. 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.
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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. IBM is currently a Zacks Rank #3 (Hold).
Looking at its valuation, IBM is holding a Forward P/E ratio of 13.93. Its industry sports an average Forward P/E of 29.32, so we one might conclude that IBM is trading at a discount comparatively.
We can also see that IBM currently has a PEG ratio of 1.73. 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 1.84 based on yesterday's closing prices.
The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 240, putting it in the bottom 6% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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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