IBM (IBM) ended the recent trading session at $265.52, demonstrating a +0.12% swing from the preceding day’s closing price. The stock outpaced the S&P 500’s daily gain of 0.01%. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, added 0.32%.
Shares of the technology and consulting company witnessed a gain of 6.45% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 7.95% and outperforming the S&P 500’s gain of 5.2%.
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Investors will be eagerly watching for the performance of IBM in its upcoming earnings disclosure. The company is predicted to post an EPS of $2.64, indicating an 8.64% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $16.59 billion, indicating a 5.2% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $10.95 per share and revenue of $66.21 billion, which would represent changes of +6% and +5.5%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for IBM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 0.32% rise in the Zacks Consensus EPS estimate. As of now, IBM holds a Zacks Rank of #3 (Hold).
From a valuation perspective, IBM is currently exchanging hands at a Forward P/E ratio of 24.22. Its industry sports an average Forward P/E of 17.85, so one might conclude that IBM is trading at a premium comparatively.
It is also worth noting that IBM currently has a PEG ratio of 5.57. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. The Computer – Integrated Systems industry had an average PEG ratio of 1.89 as trading concluded yesterday.
The Computer – Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 43, which puts it in the top 18% of all 250+ industries.