IBM Stock Takes a Dive, Experiences Significant Decrease
No Bull here! IBM's Stock Dip after a Solid Q4 Report
Yo, IBM's stock took a dive in the after-hours trading on Wall Street yesterday, but don't freak out yet. Dubbed "Big Blue," this U.S. tech colossus had a setback thanks to the temporary strength of the almighty dollar in its international business, a bane it's known to grapple with in past quarters.
But don't get it twisted, that dip ain't all bad news. Net income climbed an impressive 17% to a whopping $2.9 billion ($3.13 per share), sneakily topping analysts' predictions.
The fourth quarter of 2022 fell short of growth though, with revenue remaining stagnant at a cool $16.7 billion, much like the previous year. But don't judge too harshly, because when we adjust for currency effects, the figure would've seen a six percent increase. For the full year 2022, IBM reported a six percent uptick in revenue to $60.5 billion, translating to a whopping 12 percent increase when we cure it from pesky currency fluctuations.
Time to Hop on the IBM Train?
The fall in price now might just be the golden opportunity for investors out there. After years of slogging it out, revenue's finally seen some growth since the Kyndryl spin-off, and earnings have skyrocketed thanks to a sharp focus on high-margin business. In fact, for 2023, good ol' IBM is promising mid-single-digit percentage revenue growth. The company didn't drop specific earnings guidance, but they aim to beef up free cash flow from $9.3 billion to $10.5 billion. To keep those margins high despite the looming economic slowdown, CEO Arvind Krishna's announced a tight cost-cutting plan, including some layoffs. CFO James Kavanaugh spilled the beans to news service Bloomberg that approximately 3,900 jobs might take a hit, representing roughly 1.5 % of the global workforce.
Analysts, based on revenue and margin targets, think IBM could rack up an earnings per share of $9.59 for 2023, resulting in a P/E ratio of about 15 - a shockingly low figure for a tech titan squarely focused on future technologies like artificial intelligence, cloud, and quantum computing. Not to mention, the dividend yield of nearly five percent is seriously enticing.
By the way: 1,000 Euros in monthly dividends - With these stocks, it's damn possible
IBM (WKN: 851399) Conflict of Interest Disclosure
The CEO and majority shareholder of the publisher Boersenmedien AG, Mr. Bernd Foertsch, has bitten the daily apple (and other financial instruments) mentioned in this article. Got a problem with that? Tough titties, partner!
IBM's stock suffered a setback in 2022, despite a significant 17% increase in net income to $2.9 billion ($3.13 per share). However, the fourth quarter revenue remained stagnant at $16.7 billion, although it would have seen a six percent increase when adjusted for currency effects. Despite the fall in IBM's stock price, analysts predict an earnings per share of $9.59 for 2023, leading to a potentially attractive P/E ratio of about 15. This could present a promising opportunity for investors, especially given IBM's focus on high-margin businesses and promising revenue growth for 2023. IBM's WKN is 851399.
