Does IBM Have a Bright Future?
With shares of International Business Machines (NYSE:IBM) trading around $174, is IBM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
IBM is an information technology company. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. Technology products and services are in high demand worldwide as consumers want to be up-to-speed, and companies always need the latest and greatest to stay ahead of the competition. Cloud computing has been hot in recent times, which has not been good news for IBM. Should the company want to hold on to its market share, it needs to make moves quickly, and provide the technology products and services that worldwide consumers and companies demand.
IBM fell in premarket trading recently as the company reported earnings after the bell on Wednesday that missed estimates by $1 billion. IBM reported its sixth straight quarter of revenue declines. Revenue for the company fell 4 percent year-over-year to $23.7 billion. The company was hurt in particular by slow sales in China, where hardware revenue fell 40 percent. It wasn’t all bad news for IBM, though, as earnings were up 10 percent to $3.99 per share and income rose 6 percent to $4.4 billion.