IBM has recently appeared on Zacks.com’s list of most sought-after stocks, with shares returning +3.5% over the past month. The Zacks Computer – Integrated Systems sector, which IBM is part of, has gained 5% during this time. Analysts look into earnings estimates to determine fair value, with IBM’s current quarter expected to be $2.17 per share, showing a -0.5% change year-over-year. The consensus earnings estimate for the current fiscal year is $9.90, up +2.9% from the previous year. For the next fiscal year, the estimate is $10.32, indicating a +4.2% change from a year ago. IBM has a Zacks Rank #4 (Sell) due to recent changes in consensus estimates.
Revenue growth is crucial for a company’s financial health, with IBM’s current quarter sales estimated at $15.58 billion, showing a +0.7% year-over-year change. Estimated sales for the current and next fiscal years are $63.04 billion and $66.08 billion, indicating changes of +1.9% and +4.8% respectively. IBM reported revenue of $14.46 billion for the quarter, up +1.5% year-over-year, with earnings per share at $1.68. The company surpassed earnings per share estimates in the past four quarters but revenue estimates only once.
Valuation is key in investment decisions, and IBM has a C rating, suggesting it’s trading in line with its peers. The Zacks Value Style Score evaluates a company’s valuation metrics to determine its value relative to peers. While market rumors about IBM may be circulating, its Zacks Rank #4 implies potential underperformance in the near term. For more information, visit Zacks.com for the latest recommendations from Zacks Investment Research.
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