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Here's Why IBM (IBM) Gained But Lagged the Market Today

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IBM (IBM - Free Report) closed at $221.08 in the latest trading session, marking a +0.11% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.42%. On the other hand, the Dow registered a gain of 0.04%, and the technology-centric Nasdaq increased by 0.38%.

The technology and consulting company's stock has climbed by 9.26% in the past month, exceeding the Computer and Technology sector's gain of 1.78% and the S&P 500's gain of 2.06%.

Investors will be eagerly watching for the performance of IBM in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on October 23, 2024. The company is predicted to post an EPS of $2.25, indicating a 2.27% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $15.12 billion, up 2.5% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $10.10 per share and revenue of $63.25 billion, which would represent changes of +4.99% and +2.25%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for IBM. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. IBM is currently sporting a Zacks Rank of #2 (Buy).

In the context of valuation, IBM is at present trading with a Forward P/E ratio of 21.86. This expresses a premium compared to the average Forward P/E of 21.31 of its industry.

One should further note that IBM currently holds a PEG ratio of 4.91. 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. The Computer - Integrated Systems industry had an average PEG ratio of 4.01 as trading concluded yesterday.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 179, positioning it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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