International Business Machinery (NYSE:IBM) Investors Need to Worry?

International business machinery (NYSE: IBM) has done a lot of changes in its business for maintaining its position in the market as well as its stock prices. Cloud computing was its biggest challenge which started in year 2013 and now it’s almost 4 years passed. But despite this challenging environment, where demand for IBM’s desktop computers and big server declining, company is trying its level best to reinvent itself. Cloud computing has potential to uplift the company.

Now, the company is taking step towards quantum computing. A quantum computer is very different. Yes, quantum computing is not going to pay any benefit to IBM in near future. But, if it works in its full potential, IBM shareholders will be benefited.

IBM is acquiring new startups, to give more strength and opportunity to the company. Recently it has acquired new startups by spending $5.4 billion.

Analyst Opinion on IBM (NYSE)

If we talk about Analyst point of view, among 31 analyst who are covering IBM, 10 analyst have BUY rating, 5 have SELL and 16 have HOLD rating. So, here also investors can pay attention before selling stock.

International business machinery provides information technology services worldwide. Its cognitive solution service includes Watson, a cognitive computing platform that interacts in natural languages, processes big data, and learns from interaction with people and computers. It’s Market cap. is 141.6B, while the P/E ratio is 12.76. Beta of the company is 1.07. Again 52 week high and low is 139.13 and 182.79 respectively.

Though investor’s sentiment has worsened as 100 investors sold IBM’S share and 695 reduced their holding. Currently 0.09% of shares owned by insiders. Both long term and short term investor focuses on liquidity of stocks. So, for that concern, liquidity of the company in the recent quarter result was 1.40 current ratio and 2.32 debt to equity ratio while long term debt to equity ratio stands at 2.11.

Analysts expects company to report $5.16 EPS on 1January 2018, which is 2.99% change from last quarter’s EPS of $5.01. If this expectation corrects, IBM’s profit would be $4.78 billion.

Should investors worry?

IBM is trying its level best to come out from challenges, by acquiring startups, changing business models, also by improving business outlook and recent step for quantum computing. Besides, it has strong cash generation capability which gives opportunity to make its base strong for investors.

 

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