IBM (IBM) Outpaces Stock Market Gains: What You Should Know

IBM (IBM) closed the most recent trading day at $121.50, moving +1.85% from the previous trading session. This change outpaced the S&P 500's 1.45% gain on the day. At the same time, the Dow added 1.22%, and the tech-heavy Nasdaq gained 0.78%.

Coming into today, shares of the technology and consulting company had gained 1.12% in the past month. In that same time, the Computer and Technology sector lost 5.61%, while the S&P 500 lost 7.42%.

IBM will be looking to display strength as it nears its next earnings release, which is expected to be April 20, 2020. The company is expected to report EPS of $1.69, down 24.89% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $18.25 billion, up 0.35% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.73 per share and revenue of $76.71 billion, which would represent changes of -0.62% and -0.57%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 4.74% lower. IBM currently has a Zacks Rank of #4 (Sell).

Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 9.37. Its industry sports an average Forward P/E of 9.37, so we one might conclude that IBM is trading at a no noticeable deviation comparatively.

Meanwhile, IBM's PEG ratio is currently 1.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.44 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 172, which puts it in the bottom 33% 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.

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

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