IBM (IBM) Beats Stock Market Upswing: What Investors Need to Know

In the latest close session, IBM (IBM) was up +1.13% at $234.31. The stock exceeded the S&P 500, which registered a gain of 1.06% for the day. At the same time, the Dow added 1.18%, and the tech-heavy Nasdaq gained 1.4%.

Shares of the technology and consulting company have depreciated by 1.79% over the course of the past month, underperforming the Computer and Technology sector's gain of 3.99%, and the S&P 500's gain of 2.46%.

Analysts and investors alike will be keeping a close eye on the performance of IBM in its upcoming earnings disclosure. The company's upcoming EPS is projected at $2.9, signifying a 9.43% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $16.88 billion, reflecting a 3.34% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.33 per share and a revenue of $70.43 billion, signifying shifts of +6.38% and +4.28%, respectively, from the last 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. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% lower. IBM presently features a Zacks Rank of #3 (Hold).

In terms of valuation, IBM is presently being traded at a Forward P/E ratio of 18.79. This valuation marks a discount compared to its industry average Forward P/E of 20.27.

It's also important to note that IBM currently trades at a PEG ratio of 2.21. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Computer - Integrated Systems industry held an average PEG ratio of 0.61.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 40, placing it within the top 17% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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

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