A Glimpse of IBM's Earnings Potential

IBM IBM is set to give its latest quarterly earnings report on Wednesday, 2024-10-23. Here's what investors need to know before the announcement.

Analysts estimate that IBM will report an earnings per share (EPS) of $2.22.

IBM bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.

New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

Historical Earnings Performance

Last quarter the company beat EPS by $0.24, which was followed by a 4.33% increase in the share price the next day.

Here's a look at IBM's past performance and the resulting price change:

Stock Performance

Shares of IBM were trading at $231.75 as of October 21. Over the last 52-week period, shares are up 69.37%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Views on IBM

For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding IBM.

The consensus rating for IBM is Buy, derived from 12 analyst ratings. An average one-year price target of $222.42 implies a potential 4.03% downside.

Comparing Ratings with Competitors

The below comparison of the analyst ratings and average 1-year price targets of Accenture, Infosys and Gartner, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.

• The consensus outlook from analysts is an Outperform trajectory for Accenture, with an average 1-year price target of $380.19, indicating a potential 64.05% upside.
• Infosys received a Neutral consensus from analysts, with an average 1-year price target of $25.0, implying a potential 89.21% downside.
• Gartner is maintaining an Buy status according to analysts, with an average 1-year price target of $522.57, indicating a potential 125.49% upside.

Overview of Peer Analysis

The peer analysis summary offers a detailed examination of key metrics for Accenture, Infosys and Gartner, providing valuable insights into their respective standings within the industry and their market positions and comparative performance.

Key Takeaway:

IBM ranks at the bottom for Revenue Growth among its peers. It is in the middle for Gross Profit. IBM is at the top for Return on Equity.

Discovering IBM: A Closer Look

IBM looks to be a part of every aspect of an enterprise's IT needs. The company primarily sells software, IT services, consulting, and hardware. IBM operates in 175 countries and employs approximately 350,000 people. The company has a robust roster of 80,000 business partners to service 5,200 clients, which includes 95% of all Fortune 500. While IBM is a B2B company, IBM's outward impact is substantial. For example, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections in the world.

IBM's Economic Impact: An Analysis

Market Capitalization Analysis: With a profound presence, the company's market capitalization is above industry averages. This reflects substantial size and strong market recognition.

Positive Revenue Trend: Examining IBM's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 1.9% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. When compared to others in the Information Technology sector, the company excelled with a growth rate higher than the average among peers.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 11.63%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): The company's ROE is a standout performer, exceeding industry averages. With an impressive ROE of 7.76%, the company showcases effective utilization of equity capital.

Return on Assets (ROA): IBM's financial strength is reflected in its exceptional ROA, which exceeds industry averages. With a remarkable ROA of 1.35%, the company showcases efficient use of assets and strong financial health.

Debt Management: IBM's debt-to-equity ratio stands notably higher than the industry average, reaching 2.49. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

To track all earnings releases for IBM visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.