Breaking Down IBM’s Q3 ’24 Financial Results
IBM (NYSE:) is set to reveal its Q3 ’24 financial results on October 23rd, 2024, after the market closes. Let’s dive into the details and analyze what this means for investors.
Chart Breakout and Historical Performance
- In September ’24, IBM’s stock broke out above the April ’13 highs of $213 – $215, marking a significant milestone.
- This breakout signals an 11-year base, showcasing IBM’s historical pattern of range-bound stock prices followed by major breakouts, dating back to the 1980s.
IBM Fundamentals and Valuation
- Consensus expectations for Q3 ’24 predict $2.23 EPS, $2.6 billion operating income, and $15 billion revenue, with expected year-over-year growth of 1%, 15%, and 2% respectively.
- In Q2 ’24, IBM surpassed expectations with a 48% upside surprise in operating income, highlighting the company’s strong performance.
- Looking ahead to Q4 ’24, analysts anticipate $3.76 EPS, $4.3 billion operating income, and $17.9 billion revenue, with projected growth rates of -2%, 16%, and 3% year-over-year.
- For full-year 2025, the consensus estimates stand at $10.72 EPS and $66.3 billion revenue, signaling a 5% growth outlook.
Cash Flow and Valuation Metrics
- IBM’s improved free cash flow is a positive development, showcasing a shift from previous capex spending trends.
- The company’s cash flow valuation metrics are favorable, with a 12x and 14x TTM cash flow and free cash flow multiple.
- IBM’s cash flow now covers net income by 156% and 143%, indicating a strong financial position.
Conclusion
- IBM’s technical breakout and fundamental performance in 2024 make it an intriguing investment opportunity.
- Sustainable revenue growth and a robust AI strategy are essential for IBM to compete with tech growth giants.
- The resurgence of old tech companies like IBM, fueled by AI advancements, presents new opportunities for growth and reinvention.
- While this analysis is not a recommendation, it provides insights into IBM’s financial outlook and potential for investors.
In essence, IBM’s Q3 ’24 results and future projections offer a glimpse into the company’s financial health and growth prospects. For investors, understanding these factors can guide decision-making and portfolio management strategies. By analyzing IBM’s performance and market trends, individuals can make informed choices to secure their financial future.