IBM: In The Right Direction, But Too Slowly

Thesis

Combining both fundamental and technical analysis, we will try to better understand the IBM (IBM) stock drivers especially in the current phase. We will also look for indications about the expected growth not only of revenue but also of margins and earnings. We will try to anticipate in some way if a significant progress is likely in the near future.

Technical Flaws

Analyzing the investor's demand for IBM shares, we can say that the last 22 quarters of continued decline in revenue left a negative mark that only the improvement in this indicator could reverse.

An overview of the situation can be obtained with the 9-year weekly chart below. In fact, there was a successful rise in the company's share price between late 2008 and early 2013, which went from $55 per share up to $186. The trend reversal began at the end of the period indicated above when the appearance of poor quarterly results was already noticeable. The series of lower highs and lower lows over the next 3 years is clear, culminating with a bottom of $110 in early 2016. As of this date, there has been great volatility associated with investors' expectations regarding the results of each quarter.

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