Ibm (ibm) Rises Yet Lags Behind Market: Some Facts Worth Knowing

IBM (IBM) ended the recent trading session at $249.74, demonstrating a +0.32% swing from the preceding day's closing price. The stock fell short of the S&P 500, which registered a gain of 0.49% for the day. Elsewhere, the Dow lost 0.2%, while the tech-heavy Nasdaq added 1.22%.

Prior to today's trading, shares of the technology and consulting company had lost 2.26% over the past month. This has was narrower than the Computer and Technology sector's loss of 12.07% and the S&P 500's loss of 8.15% in that time.

The investment community will be closely monitoring the performance of IBM in its forthcoming earnings report. The company is predicted to post an EPS of $1.43, indicating a 14.88% decline compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $14.44 billion, showing a 0.18% drop compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $10.78 per share and revenue of $64.85 billion. These totals would mark changes of +4.36% and +3.34%, respectively, from last year.

Any recent changes to analyst estimates for IBM should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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, the Zacks Consensus EPS estimate has moved 0.31% higher. IBM is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 23.08. This indicates a premium in contrast to its industry's Forward P/E of 13.27.

It is also worth noting that IBM currently has a PEG ratio of 5.46. 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. As the market closed yesterday, the Computer - Integrated Systems industry was having an average PEG ratio of 1.52.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 86, this industry ranks in the top 35% of all industries, numbering over 250.

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.

To follow IBM in the coming trading sessions, be sure to utilize Zacks.com.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research