IBM Inc. scheduled to report earnings after Wednesday’s close. The stock just hit a record high near $237/share and is currently trading near that level. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $2.27/share on $15.15 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $2.34/share. The Whisper number is the Street’s unofficial view on earnings.
A Closer Look At The Fundamentals
The company has grown its earnings nicely over the last several years. In 2020 the company earned $6.82, in 2021 the company earned $7.92. In 2022, earnings grew to $9.13 and in 2023 earnings came in at $9.63. Looking forward, the company is expected to grow its earnings to $10.16 in 2024 and then $10.71 in 2025. Meanwhile, the stock sports a price to earnings ratio of 23 which is near the S&P 500.
A Closer Look At The Technicals
Technically, the stock is acting very well and just hit a fresh all-time high. In the short-term the stock is extended and can easily pullback if earnings fail to impress. That said, the bulls want to see the stock gap up and rally after reporting earnings and the bears want to see it gap down and fall. The stock trades around 3.5 million shares per day and the last time it reported earnings it gapped up nearly 8% on over 9 million shares! That’s a good indicator for institutional accumulation.
Company Profile
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide.
The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry.
The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment.
The Financing segment offers client and commercial financing, facilitates IBM
IBM
clients’ acquisition of hardware, software, and services.
The company has a strategic partnership to various companies including hyper scalers, service providers, global system integrators, and software and hardware vendors that includes Adobe
Adobe
, Amazon Web services, Microsoft
Microsoft
, Oracle
Oracle
, Salesforce
Salesforce
, Samsung Electronics and SAP, and others.
The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclosure: The stock has been featured on FindLeadingStocks.com
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