INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
BIT:1IBM - Borsa Italiana 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. While 1IBM is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, 1IBM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
1IBM had positive earnings in the past year.
1IBM had a positive operating cash flow in the past year.
Each year in the past 5 years 1IBM has been profitable.
Each year in the past 5 years 1IBM had a positive operating cash flow.
1.2 Ratios
1IBM has a Return On Assets (4.39%) which is in line with its industry peers.
With an excellent Return On Equity value of 22.06%, 1IBM belongs to the best of the industry, outperforming 86.15% of the companies in the same industry.
With a Return On Invested Capital value of 7.56%, 1IBM perfoms like the industry average, outperforming 47.69% of the companies in the same industry.
1IBM had an Average Return On Invested Capital over the past 3 years of 7.26%. This is below the industry average of 10.97%.
The last Return On Invested Capital (7.56%) for 1IBM is above the 3 year average (7.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.39% | ||
| ROE | 22.06% | ||
| ROIC | 7.56% |
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
The Profit Margin of 1IBM (9.60%) is better than 90.77% of its industry peers.
1IBM's Profit Margin has declined in the last couple of years.
1IBM has a better Operating Margin (14.68%) than 92.31% of its industry peers.
In the last couple of years the Operating Margin of 1IBM has grown nicely.
With a Gross Margin value of 56.65%, 1IBM is not doing good in the industry: 63.08% of the companies in the same industry are doing better.
1IBM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.68% | ||
| PM (TTM) | 9.6% | ||
| GM | 56.65% |
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 3.52. This indicates that 1IBM is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.52, 1IBM is doing good in the industry, outperforming 76.92% of the companies in the same industry.
The Debt to FCF ratio of 1IBM is 4.46, which is a neutral value as it means it would take 1IBM, 4.46 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 4.46, 1IBM is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
1IBM has a Debt/Equity ratio of 1.83. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of 1IBM (1.83) is worse than 87.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.83 | ||
| Debt/FCF | 4.46 | ||
| Altman-Z | 3.52 |
ROIC/WACC0.67
WACC11.31%
2.3 Liquidity
1IBM has a Current Ratio of 1.04. This is a normal value and indicates that 1IBM is financially healthy and should not expect problems in meeting its short term obligations.
1IBM has a Current ratio of 1.04. This is in the lower half of the industry: 1IBM underperforms 66.15% of its industry peers.
1IBM has a Quick Ratio of 1.00. This is a normal value and indicates that 1IBM is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.00, 1IBM is doing worse than 66.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.49% over the past year.
The Earnings Per Share has been decreasing by -4.21% on average over the past years.
The Revenue has been growing slightly by 1.44% in the past year.
1IBM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
EPS 1Y (TTM)7.49%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%1.29%
Revenue 1Y (TTM)1.44%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.99%
3.2 Future
Based on estimates for the next years, 1IBM will show a small growth in Earnings Per Share. The EPS will grow by 5.23% on average per year.
Based on estimates for the next years, 1IBM will show a small growth in Revenue. The Revenue will grow by 4.97% on average per year.
EPS Next Y4.45%
EPS Next 2Y4.5%
EPS Next 3Y4.23%
EPS Next 5Y5.23%
Revenue Next Year4.54%
Revenue Next 2Y4.31%
Revenue Next 3Y4.65%
Revenue Next 5Y4.97%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.73 indicates a rather expensive valuation of 1IBM.
The rest of the industry has a similar Price/Earnings ratio as 1IBM.
The average S&P500 Price/Earnings ratio is at 28.47. 1IBM is around the same levels.
1IBM is valuated rather expensively with a Price/Forward Earnings ratio of 23.68.
66.15% of the companies in the same industry are cheaper than 1IBM, based on the Price/Forward Earnings ratio.
1IBM is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.73 | ||
| Fwd PE | 23.68 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1IBM is valued a bit more expensive than 73.85% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, 1IBM is valued a bit more expensive than the industry average as 64.62% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.18 | ||
| EV/EBITDA | 19.89 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of 1IBM may justify a higher PE ratio.
PEG (NY)5.56
PEG (5Y)N/A
EPS Next 2Y4.5%
EPS Next 3Y4.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.59%, 1IBM has a reasonable but not impressive dividend return.
1IBM's Dividend Yield is a higher than the industry average which is at 4.29.
Compared to an average S&P500 Dividend Yield of 2.28, 1IBM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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 102.04% of its income as dividend. This is not a sustainable payout ratio.
The dividend of 1IBM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP102.04%
EPS Next 2Y4.5%
EPS Next 3Y4.23%
INTL BUSINESS MACHINES CORP
BIT:1IBM (1/30/2025, 7:00:00 PM)
247.25
+35.5 (+16.77%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners61.42%
Inst Owner ChangeN/A
Ins Owners0.08%
Ins Owner ChangeN/A
Market Cap228.62B
Analysts69.23
Price Target211.04 (-14.65%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
Yearly Dividend6.68
Dividend Growth(5Y)0.83%
DP102.04%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.88%
Min EPS beat(2)2.27%
Max EPS beat(2)3.49%
EPS beat(4)4
Avg EPS beat(4)4.84%
Min EPS beat(4)2.27%
Max EPS beat(4)9.54%
EPS beat(8)8
Avg EPS beat(8)4.72%
EPS beat(12)11
Avg EPS beat(12)3.23%
EPS beat(16)14
Avg EPS beat(16)2.96%
Revenue beat(2)0
Avg Revenue beat(2)-1.29%
Min Revenue beat(2)-1.66%
Max Revenue beat(2)-0.93%
Revenue beat(4)0
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)-0.01%
Revenue beat(8)0
Avg Revenue beat(8)-1.1%
Revenue beat(12)4
Avg Revenue beat(12)-0.15%
Revenue beat(16)5
Avg Revenue beat(16)-4.51%
PT rev (1m)-0.66%
PT rev (3m)4.92%
EPS NQ rev (1m)-0.18%
EPS NQ rev (3m)-1.71%
EPS NY rev (1m)-0.64%
EPS NY rev (3m)-0.06%
Revenue NQ rev (1m)-0.26%
Revenue NQ rev (3m)-1.28%
Revenue NY rev (1m)-0.26%
Revenue NY rev (3m)-0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.73 | ||
| Fwd PE | 23.68 | ||
| P/S | 3.77 | ||
| P/FCF | 19.18 | ||
| P/OCF | 17.57 | ||
| P/B | 8.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.89 |
EPS(TTM)10
EY4.04%
EPS(NY)10.44
Fwd EY4.22%
FCF(TTM)12.89
FCFY5.21%
OCF(TTM)14.07
OCFY5.69%
SpS65.67
BVpS28.57
TBVpS-46.1
PEG (NY)5.56
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.39% | ||
| ROE | 22.06% | ||
| ROCE | 8.85% | ||
| ROIC | 7.56% | ||
| ROICexc | 8.79% | ||
| ROICexgc | 43.5% | ||
| OM | 14.68% | ||
| PM (TTM) | 9.6% | ||
| GM | 56.65% | ||
| FCFM | 19.63% |
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-Score7
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.83 | ||
| Debt/FCF | 4.46 | ||
| Debt/EBITDA | 3.59 | ||
| Cap/Depr | 24.15% | ||
| Cap/Sales | 1.8% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 96.89% | ||
| Profit Quality | 204.5% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 3.52 |
F-Score7
WACC11.31%
ROIC/WACC0.67
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)7.49%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%1.29%
EPS Next Y4.45%
EPS Next 2Y4.5%
EPS Next 3Y4.23%
EPS Next 5Y5.23%
Revenue 1Y (TTM)1.44%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.99%
Revenue Next Year4.54%
Revenue Next 2Y4.31%
Revenue Next 3Y4.65%
Revenue Next 5Y4.97%
EBIT growth 1Y4.79%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year50.63%
EBIT Next 3Y14.39%
EBIT Next 5Y11.03%
FCF growth 1Y1.63%
FCF growth 3Y7.1%
FCF growth 5Y0.76%
OCF growth 1Y-3.48%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%