As International Business Machines prepares to report third-quarter earnings after the closing bell Wednesday, the company has a prime opportunity to rewrite its narrative -- though it faces a remarkably high bar.

Investors are still reeling from Big Blue's second-quarter results, which the company delivered a week early in the form of a rare pre-announcement. The stock sank 25% on July 14, the day of the announcement, and marked its worst trading session on record.

Since then, shares haven't staged much of a comeback. The stock remains down nearly 17% since the close on July 13, while the S&P 500 and Nasdaq Composite each have gained more than 2%.

After such a steep plunge, expectations are rightly subdued. Daniel Morgan, senior portfolio manager at Synovus Trust, said finding a positive catalyst ahead of the earnings report won't be easy.

Analysts surveyed by FactSet expect adjusted earnings of $2.85 a share and $16.8 billion in revenue, which would be a modest 3% increase in revenue from the same period last year. While that marks a pickup sequentially, it remains far below the 9.5% growth delivered in the first quarter.

It makes sense why Wall Street might temper its enthusiasm given IBM's persistent struggles with sluggish organic growth. To offset the slump, the company has been leaning on software acquisitions in recent years, most notably through the purchases of Red Hat, HashiCorp., and Confluent.

Jefferies analyst Brent Thill characterized IBM as a "show-me story in the third quarter with a lowered bar." However, he believes expectations have been reset coming out of the second quarter, when the earnings miss reflected poor execution and a delay in several large mainframe deals.

By the time IBM CEO Arvind Krishna spoke with analysts in late July, a third of those transactions had already closed. Thill posited that if IBM can ultimately recover two-thirds to three-quarters of the missed deals and boost its full-year guidance, the stock could move higher.

IBM's business rests on four key pillars. A significant portion of the world's transaction data already resides on IBM Z, a family of enterprise mainframe computer systems. Other offerings build on top of it, including artificial-intelligence orchestration tools, cloud-based software, and a consulting arm to implement the technology.

Every segment comes with pros and cons. Ahead of the earnings release, Citi analyst Fatima Boolani wrote that while results should largely match investor expectations, IBM has room to redeem itself over the long run.

Red Hat, the subsidiary serving as IBM's primary growth engine, could be poised for a modest re-acceleration in growth in the quarter. However, Boolani believes those gains may be canceled out by weakness in other software products.

While mainframe revenue is expected to remain soft this time around, Boolani argues that the segment could stage a comeback in the fourth quarter. Similarly, while consulting sales likely will be modest, she expects the business outperform pure-play IT service peers on profitability.

You would be hard-pressed to find an investor who believes IBM is positioned to compete directly with cloud giants like Amazon, Microsoft, Oracle, or Alphabet-owned Google. Still, Synovus Trust's Morgan believes IBM's hybrid cloud portfolio gives the company "a toe-in to this lucrative space."

While unlikely to take center stage in the earnings report, quantum computing remains a bright spot that could warrant a nod from management. IBM remains an early technical and commercial leader in the space, as Barron's noted in a profile last year.