INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
BIT:1IBM - Euronext Milan - US4592001014 - Common Stock - Currency: EUR
Overall 1IBM gets a fundamental rating of 4 out of 10. We evaluated 1IBM against 71 industry peers in the IT Services industry. There are concerns on the financial health of 1IBM while its profitability can be described as average. While showing a medium growth rate, 1IBM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year 1IBM was profitable.
1IBM had a positive operating cash flow in the past year.
In the past 5 years 1IBM has always been profitable.
1IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.76%, 1IBM is in line with its industry, outperforming 45.07% of the companies in the same industry.
1IBM has a Return On Equity of 20.36%. This is amongst the best in the industry. 1IBM outperforms 85.92% of its industry peers.
1IBM has a Return On Invested Capital (7.22%) which is comparable to the rest of the industry.
1IBM had an Average Return On Invested Capital over the past 3 years of 7.26%. This is below the industry average of 10.64%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 20.36% | ||
| ROIC | 7.22% |
ROA(3y)3.74%
ROA(5y)3.83%
ROE(3y)20.94%
ROE(5y)24.07%
ROIC(3y)7.26%
ROIC(5y)6.26%
1.3 Margins
With an excellent Profit Margin value of 8.71%, 1IBM belongs to the best of the industry, outperforming 90.14% of the companies in the same industry.
In the last couple of years the Profit Margin of 1IBM has declined.
Looking at the Operating Margin, with a value of 14.89%, 1IBM belongs to the top of the industry, outperforming 92.96% of the companies in the same industry.
In the last couple of years the Operating Margin of 1IBM has grown nicely.
1IBM has a Gross Margin (57.04%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of 1IBM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.89% | ||
| PM (TTM) | 8.71% | ||
| GM | 57.04% |
OM growth 3Y13.36%
OM growth 5Y1.77%
PM growth 3Y-1.4%
PM growth 5Y-10.1%
GM growth 3Y1.05%
GM growth 5Y0.73%
2. Health
2.1 Basic Checks
1IBM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for 1IBM has been increased compared to 1 year ago.
The number of shares outstanding for 1IBM has been increased compared to 5 years ago.
1IBM has a better debt/assets ratio than last year.
2.2 Solvency
1IBM has an Altman-Z score of 3.46. This indicates that 1IBM is financially healthy and has little risk of bankruptcy at the moment.
1IBM has a Altman-Z score of 3.46. This is in the better half of the industry: 1IBM outperforms 69.01% of its industry peers.
1IBM has a debt to FCF ratio of 5.06. This is a neutral value as 1IBM would need 5.06 years to pay back of all of its debts.
1IBM's Debt to FCF ratio of 5.06 is in line compared to the rest of the industry. 1IBM outperforms 40.85% of its industry peers.
A Debt/Equity ratio of 2.10 is on the high side and indicates that 1IBM has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.10, 1IBM is doing worse than 83.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 3.46 |
ROIC/WACC0.79
WACC9.1%
2.3 Liquidity
A Current Ratio of 1.01 indicates that 1IBM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.01, 1IBM is doing worse than 74.65% of the companies in the same industry.
1IBM has a Quick Ratio of 1.01. This is a bad value and indicates that 1IBM is not financially healthy enough and could expect problems in meeting its short term obligations.
1IBM has a Quick ratio of 0.97. This is in the lower half of the industry: 1IBM underperforms 74.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
1IBM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.22%.
The Earnings Per Share has been decreasing by -4.21% on average over the past years.
Looking at the last year, 1IBM shows a small growth in Revenue. The Revenue has grown by 1.23% in the last year.
The Revenue has been growing slightly by 1.69% on average over the past years.
EPS 1Y (TTM)3.22%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%-4.76%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.55%
3.2 Future
1IBM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.40% yearly.
1IBM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.75% yearly.
EPS Next Y6.83%
EPS Next 2Y6.59%
EPS Next 3Y6.29%
EPS Next 5Y6.4%
Revenue Next Year5.51%
Revenue Next 2Y4.94%
Revenue Next 3Y4.74%
Revenue Next 5Y4.75%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 28.48, 1IBM can be considered very expensive at the moment.
1IBM's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.15, 1IBM is valued at the same level.
With a Price/Forward Earnings ratio of 24.88, 1IBM is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as 1IBM.
When comparing the Price/Forward Earnings ratio of 1IBM to the average of the S&P500 Index (21.60), we can say 1IBM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.48 | ||
| Fwd PE | 24.88 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1IBM indicates a slightly more expensive valuation: 1IBM is more expensive than 73.24% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1IBM indicates a slightly more expensive valuation: 1IBM is more expensive than 60.56% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.71 | ||
| EV/EBITDA | 22.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
1IBM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.17
PEG (5Y)N/A
EPS Next 2Y6.59%
EPS Next 3Y6.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.30%, 1IBM has a reasonable but not impressive dividend return.
1IBM's Dividend Yield is a higher than the industry average which is at 6.93.
1IBM's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
5.2 History
The dividend of 1IBM has a limited annual growth rate of 0.83%.
Dividend Growth(5Y)0.83%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
1IBM pays out 112.79% of its income as dividend. This is not a sustainable payout ratio.
1IBM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP112.79%
EPS Next 2Y6.59%
EPS Next 3Y6.29%
BIT:1IBM (6/27/2025, 7:00:00 PM)
249.5
-1.45 (-0.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners65.15%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap231.89B
Analysts72.59
Price Target227.31 (-8.89%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
Yearly Dividend5.71
Dividend Growth(5Y)0.83%
DP112.79%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.28%
Min EPS beat(2)3.59%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)7.09%
Min EPS beat(4)2.27%
Max EPS beat(4)12.97%
EPS beat(8)8
Avg EPS beat(8)5.47%
EPS beat(12)11
Avg EPS beat(12)4.29%
EPS beat(16)14
Avg EPS beat(16)3.31%
Revenue beat(2)1
Avg Revenue beat(2)-0.46%
Min Revenue beat(2)-0.93%
Max Revenue beat(2)0.01%
Revenue beat(4)1
Avg Revenue beat(4)-0.65%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)0.01%
Revenue beat(8)1
Avg Revenue beat(8)-0.89%
Revenue beat(12)4
Avg Revenue beat(12)-0.27%
Revenue beat(16)6
Avg Revenue beat(16)-2.96%
PT rev (1m)2.29%
PT rev (3m)-7.09%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)1.21%
EPS NY rev (1m)2.08%
EPS NY rev (3m)1.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.36%
Revenue NY rev (1m)1.74%
Revenue NY rev (3m)1.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.48 | ||
| Fwd PE | 24.88 | ||
| P/S | 4.32 | ||
| P/FCF | 21.71 | ||
| P/OCF | 19.89 | ||
| P/B | 10.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.09 |
EPS(TTM)8.76
EY3.51%
EPS(NY)10.03
Fwd EY4.02%
FCF(TTM)11.49
FCFY4.61%
OCF(TTM)12.55
OCFY5.03%
SpS57.76
BVpS24.71
TBVpS-47.41
PEG (NY)4.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 20.36% | ||
| ROCE | 8.46% | ||
| ROIC | 7.22% | ||
| ROICexc | 8.58% | ||
| ROICexgc | 54.54% | ||
| OM | 14.89% | ||
| PM (TTM) | 8.71% | ||
| GM | 57.04% | ||
| FCFM | 19.89% |
ROA(3y)3.74%
ROA(5y)3.83%
ROE(3y)20.94%
ROE(5y)24.07%
ROIC(3y)7.26%
ROIC(5y)6.26%
ROICexc(3y)8.29%
ROICexc(5y)7.07%
ROICexgc(3y)40.75%
ROICexgc(5y)31.79%
ROCE(3y)8.5%
ROCE(5y)7.33%
ROICexcg growth 3Y26.58%
ROICexcg growth 5Y17.04%
ROICexc growth 3Y17.55%
ROICexc growth 5Y7.25%
OM growth 3Y13.36%
OM growth 5Y1.77%
PM growth 3Y-1.4%
PM growth 5Y-10.1%
GM growth 3Y1.05%
GM growth 5Y0.73%
F-Score5
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 5.06 | ||
| Debt/EBITDA | 4.01 | ||
| Cap/Depr | 24.38% | ||
| Cap/Sales | 1.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 97.03% | ||
| Profit Quality | 228.33% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 3.46 |
F-Score5
WACC9.1%
ROIC/WACC0.79
Cap/Depr(3y)35.46%
Cap/Depr(5y)39.55%
Cap/Sales(3y)2.66%
Cap/Sales(5y)3.73%
Profit Quality(3y)294.17%
Profit Quality(5y)264.98%
High Growth Momentum
Growth
EPS 1Y (TTM)3.22%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%-4.76%
EPS Next Y6.83%
EPS Next 2Y6.59%
EPS Next 3Y6.29%
EPS Next 5Y6.4%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.55%
Revenue Next Year5.51%
Revenue Next 2Y4.94%
Revenue Next 3Y4.74%
Revenue Next 5Y4.75%
EBIT growth 1Y5.13%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year59.42%
EBIT Next 3Y21.07%
EBIT Next 5Y10.85%
FCF growth 1Y39.31%
FCF growth 3Y7.1%
FCF growth 5Y0.76%
OCF growth 1Y24.5%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%