Will the IBM Stock Benefit From the Acquisition of Prescinto?

International Business Machines Corporation IBM recently announced the acquisition of Prescinto, a prominent provider of asset performance management software-as-a-service tailored for the renewable energy industry. Headquartered in Bangalore, India, Prescinto commenced its operation in 2016. Since then, the company’s operation has expanded across 14 countries with 16 Gigawatts of energy assets under its management.

What Does the Acquisition Bring to the Table?

With AI at the core, Prescinto’s cutting-edge technology addresses some vital functionalities of asset performance management of the renewable energy sector. This solution uses high-definition maps, real-time monitoring and custom alerts to provide a comprehensive and centralized visualization of assets. It deploys open-source protocols and a data governance layer for efficient data capture. Its AI-based analysis swiftly detects losses and offers data visualization and actionable insights to optimize energy generation. These leading-edge features facilitate efficient management, streamline operations and maintenance, maximizing return on investment.

IBM’s asset lifecycle management product Maximo Application Suite (MAS) already has a strong market presence across several sectors such as water, oil, natural gas and nuclear energy. Integration of Prescinto’s technology will further augment the capabilities of IBM MAS, strengthen its position in the energy and utility sector and reinforce IBM’s ability to support the enterprise’s sustainability goals.

Will the Buyout Drive IBM’s Share Performance?

The shift toward green energy adoption is gaining pace across industries globally. However, renewable energy companies are facing several challenges to maintain an increasingly complex system that includes high-tech devices like turbines, solar panels and inverters. IBM is aiming to develop a robust solution suite that will maximize energy output, enhance system effectiveness and minimize downtime.

Research suggests that the utilities asset management market is projected to reach a valuation of $12.4 billion in 2031, with a compound annual growth of 11.3%. The acquisition of Prescinto underscores IBM’s strategic alignment with this emerging market trend. This bodes well for the company’s long-term growth.

IBM recently signed an agreement to acquire Accelalpha, a company that specializes in Oracle Cloud applications. These strategic buyouts also reflect IBM’s broader strategy of enhancing its AI native product offerings for diverse use cases, solidifying the company’s leadership position in digital transformation across industries.

IBM Stock’s Price Movement

Shares of IBM have gained 65.6% in the past year compared with the industry’s growth of 50.9%.

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IBM’s Zacks Rank and Key Picks

IBM currently carries a Zacks Rank #3 (Hold).
 
Zillow Group, Inc. ZG sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 25.81%. ZG delivered an earnings surprise of 37.41%, on average, in the trailing four quarters. The company is witnessing solid momentum in rental revenues, driven by growth in both multi and single-family listings, which is a positive factor. 

Ubiquiti Inc. UI sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.

UI’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.

Workday Inc. WDAY sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
 
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes the process easier for organizations to provide analytical insights and decision support.

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