IBM (IBM) Stock Sinks As Market Gains: What You Should Know

IBM (IBM) closed at $138 in the latest trading session, marking a -0.5% move from the prior day. This change lagged the S&P 500's daily gain of 0.18%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.03%.

Coming into today, shares of the technology and consulting company had gained 13.21% in the past month. In that same time, the Computer and Technology sector gained 5.62%, while the S&P 500 gained 4.28%.

IBM will be looking to display strength as it nears its next earnings release. On that day, IBM is projected to report earnings of $2.22 per share, which would represent a year-over-year decline of 9.39%. Our most recent consensus estimate is calling for quarterly revenue of $18.77 billion, down 1.57% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $13.92 per share and revenue of $78.31 billion, which would represent changes of +0.8% and -1.61%, respectively, from the prior year.

Investors might also notice 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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.4% higher within the past month. IBM is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note IBM's current valuation metrics, including its Forward P/E ratio of 9.97. Its industry sports an average Forward P/E of 10.25, so we one might conclude that IBM is trading at a discount comparatively.

Meanwhile, IBM's PEG ratio is currently 2.46. 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. The Computer - Integrated Systems was holding an average PEG ratio of 2.46 at yesterday's closing price.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 50, putting it in the top 20% 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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