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IBM (IBM) Outpaces Stock Market Gains: What You Should Know

IBM (IBM) closed at $125.94 in the latest trading session, marking a +1.82% move from the prior day. This move outpaced the S&P 500's daily gain of 0.89%. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq lost 0.68%.

Heading into today, shares of the technology and consulting company had lost 8.39% over the past month, lagging the Computer and Technology sector's gain of 2.42% and the S&P 500's loss of 3.9% in that time.

IBM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.27, down 9.29% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $14.29 billion, up 0.62% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.46 per share and revenue of $62.09 billion, which would represent changes of +3.61% and +2.58%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for IBM. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% higher. IBM currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, IBM is holding a Forward P/E ratio of 13.07. This represents a premium compared to its industry's average Forward P/E of 10.52.

Investors should also note that IBM has a PEG ratio of 3.2 right now. 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. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 1.37 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

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

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