IBM has recently been added to Zacks.com’s list of Most Wanted Stocks, prompting investors to consider key factors influencing the stock’s performance. Over the past month, IBM’s shares have returned +1.7%, compared to the Zacks S&P 500 Composite’s +3.2% change. The Zacks Computer industry – Integrated Systems, where IBM belongs, has gained 2.1% during this period.
Instead of reacting to press releases or rumors, Zacks focuses on evaluating changes in a company’s earnings outlook. By analyzing how sell-side analysts are revising their earnings estimates based on current business trends, Zacks determines the fair value of a company’s shares. IBM is expected to post earnings of $2.17 per share for the current quarter, with consensus estimates indicating a +2.9% year-over-year change for the current fiscal year.
IBM’s potential revenue growth is also crucial for its financial health, with estimates pointing to a +0.7% variation in revenue for the current quarter. The company reported revenue of $14.46 billion in the latest quarter, exceeding the Zacks Consensus Estimate of $14.57 billion. IBM surpassed consensus EPS estimates in the past four quarters, indicating strong financial performance.
Valuation is another key factor in making investment decisions. IBM’s valuation metrics, such as price-to-earnings (P/E) and price-to-sales (P/S) ratios, suggest that the stock is trading on par with its peers. While the Zacks Rank suggests that IBM may underperform the broader market in the near term, further research is recommended to fully understand the stock’s potential.
In conclusion, analyzing the earnings outlook, revenue growth, reported results, and valuation metrics can help investors determine the potential of IBM’s stock in the future. Additional information on Zacks.com can provide valuable insights for investors looking to make informed decisions. It is important to conduct thorough research before making any investment choices.
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