Yahoo Finance IBM (IBM) Gains But Lags Market: What You Should Know
IBM (IBM) closed at $117.71 in the latest trading session, marking a +0.11% move from the prior day. This change lagged the S&P 500's 0.78% gain on the day. Elsewhere, the Dow gained 0.68%, while the tech-heavy Nasdaq added 1.44%.
Heading into today, shares of the technology and consulting company had lost 10.84% over the past month, lagging the Computer and Technology sector's gain of 4.97% and the S&P 500's loss of 1.32% in that time.
Wall Street will be looking for positivity from IBM as it approaches its next earnings report date. On that day, IBM is projected to report earnings of $2.14 per share, which would represent a year-over-year decline of 32.49%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.72 billion, down 7.52% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.29 per share and revenue of $72.98 billion. These totals would mark changes of -11.87% and -5.4%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for IBM. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. IBM is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 10.42. Its industry sports an average Forward P/E of 39.07, so we one might conclude that IBM is trading at a discount comparatively.
It is also worth noting that IBM currently has a PEG ratio of 3.06. 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 3.06 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 173, which puts it in the bottom 32% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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