According to Zacks.com, IBM is one of the stocks that investors are most interested in. Strong fundamentals at the technology and consulting firm make it a promising short-term investment, and its Zacks Rank #2 (Buy) suggests that it may soon beat the general market. As a result, it is crucial to analyse the major variables that could affect its performance.
The Zacks methodology places a high premium on evaluating changes in a company’s projected future earnings because it thinks that a company’s fair stock value is determined by the present value of its projected future earnings stream. Notably, the consensus estimate for IBM’s fiscal year earnings is $9.46, up 3.6% from the previous year.
Additionally, Zacks’ endorsement of IBM is heavily influenced by its anticipated revenue growth. For the current quarter, the average sales forecast is $14.29 billion, representing a year-over-year gain of 0.6%. Additionally, projections for the current and following fiscal years show increases of 2.6% and 4%, or $62.09 billion and $64.58 billion, respectively.
Similarly, IBM has consistently outperformed consensus revenue and EPS projections over the past four quarters, demonstrating its excellent capacity to produce results and foster immediate development.
In order to determine whether a stock is overvalued, undervalued, or appropriately valued, the Zacks Style Scores System uses the Zacks Value Style Score, which evaluates both conventional and unconventional valuation metrics. Stocks are divided into five groups, with A being the highest rank, and are ranked from A to F. With a grade of C, IBM is performing comparably to its contemporaries in the market.
In conclusion, a Zacks research may help investors decide whether it is wise to pay attention to the recent market buzz around the technology giant because IBM has a Zacks Rank of 2, which suggests that the business may soon outperform the broader market.