IBM Stock Up After Blue Box Acquisition

NEW YORK (TheStreet) -- Shares of International Business Machines (IBM) are up 0.27% to $170.11 after the IT products and services provider said today that it has acquired Blue Box Group, a managed private cloud provider built on OpenStack. Financial details were not disclosed.

"The acquisition of Blue Box accelerates IBM's open cloud strategy, making it easier for our clients to move to data and applications across clouds and adopt hybrid cloud environments," said Jim Comfort,  the company's general manager of cloud services.

Additionally, acquiring Seattle-based Blue Box will allow IBM to deliver a public cloud-like experience within the client's own data center, relieving organizations of the burden of traditional private cloud deployments, the company highlighted.

Separately, TheStreet Ratings team rates INTL BUSINESS MACHINES CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTL BUSINESS MACHINES CORP (IBM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market, INTL BUSINESS MACHINES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $3,610.00 million or 8.53% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.71%.
  • INTL BUSINESS MACHINES CORP reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, INTL BUSINESS MACHINES CORP increased its bottom line by earning $15.66 versus $15.37 in the prior year. This year, the market expects an improvement in earnings ($15.87 versus $15.66).
  • The gross profit margin for INTL BUSINESS MACHINES CORP is rather high; currently it is at 53.91%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.88% trails the industry average.
  • Despite the weak revenue results, IBM has outperformed against the industry average of 22.5%. Since the same quarter one year prior, revenues fell by 11.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: IBM Ratings Report

More from Markets

GE Confirms $11.1 Billion Transportation Merger With Wabtec

GE Confirms $11.1 Billion Transportation Merger With Wabtec

Global Stocks Rally as US-China Trade War Thaws; Dow Could Test 25,000

Global Stocks Rally as US-China Trade War Thaws; Dow Could Test 25,000

China Trade Truce, General Electric and Tesla - 5 Things You Must Know

China Trade Truce, General Electric and Tesla - 5 Things You Must Know

GE Shares Gain Amid Reports of $20 Billion Wabtec Deal

GE Shares Gain Amid Reports of $20 Billion Wabtec Deal

Listen: Here's What You Need To Know About ETFs Today (Hint: They're on Fire!)

Listen: Here's What You Need To Know About ETFs Today (Hint: They're on Fire!)