INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
Europe - BIT:1IBM - US4592001014 - Common Stock
238.05 EUR
-6.15 (-2.52%)
1IBM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 74 industry peers in the IT Services industry. 1IBM has an excellent profitability rating, but 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.
1IBM had positive earnings in each of the past 5 years.
1IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
1IBM's Return On Assets of 3.93% is in line compared to the rest of the industry. 1IBM outperforms 48.65% of its industry peers.
With an excellent Return On Equity value of 21.20%, 1IBM belongs to the best of the industry, outperforming 85.14% of the companies in the same industry.
1IBM has a Return On Invested Capital of 7.55%. This is comparable to the rest of the industry: 1IBM outperforms 41.89% of its industry peers.
1IBM had an Average Return On Invested Capital over the past 3 years of 7.26%. This is below the industry average of 11.84%.
The 3 year average ROIC (7.26%) for 1IBM is below the current ROIC(7.55%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.93% | ||
| ROE | 21.2% | ||
| ROIC | 7.55% |
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
1IBM has a Profit Margin of 9.11%. This is amongst the best in the industry. 1IBM outperforms 87.84% of its industry peers.
In the last couple of years the Profit Margin of 1IBM has declined.
The Operating Margin of 1IBM (15.32%) is better than 90.54% of its industry peers.
In the last couple of years the Operating Margin of 1IBM has grown nicely.
The Gross Margin of 1IBM (57.57%) is comparable to the rest of the industry.
1IBM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.32% | ||
| PM (TTM) | 9.11% | ||
| GM | 57.57% |
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.
1IBM has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, 1IBM has more shares outstanding
Compared to 1 year ago, 1IBM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.35 indicates that 1IBM is not in any danger for bankruptcy at the moment.
1IBM's Altman-Z score of 3.35 is fine compared to the rest of the industry. 1IBM outperforms 71.62% of its industry peers.
1IBM has a debt to FCF ratio of 5.46. This is a neutral value as 1IBM would need 5.46 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.46, 1IBM is in line with its industry, outperforming 40.54% of the companies in the same industry.
1IBM has a Debt/Equity ratio of 2.01. This is a high value indicating a heavy dependency on external financing.
1IBM has a worse Debt to Equity ratio (2.01) than 82.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.01 | ||
| Debt/FCF | 5.46 | ||
| Altman-Z | 3.35 |
ROIC/WACC0.89
WACC8.46%
2.3 Liquidity
1IBM has a Current Ratio of 0.91. 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's Current ratio of 0.91 is on the low side compared to the rest of the industry. 1IBM is outperformed by 77.03% of its industry peers.
1IBM has a Quick Ratio of 0.91. 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's Quick ratio of 0.87 is on the low side compared to the rest of the industry. 1IBM is outperformed by 75.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.32% 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 2.69% in the past year.
Measured over the past years, 1IBM shows a small growth in Revenue. The Revenue has been growing by 1.69% on average per year.
EPS 1Y (TTM)4.32%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%15.23%
Revenue 1Y (TTM)2.69%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%7.65%
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 6.21% on average per year.
The Revenue is expected to grow by 4.94% on average over the next years.
EPS Next Y8.85%
EPS Next 2Y7.92%
EPS Next 3Y7.16%
EPS Next 5Y6.21%
Revenue Next Year6.38%
Revenue Next 2Y5.37%
Revenue Next 3Y5.04%
Revenue Next 5Y4.94%
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.
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
With a Price/Earnings ratio of 25.93, 1IBM can be considered very expensive at the moment.
1IBM's Price/Earnings ratio is in line with the industry average.
1IBM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.50, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 22.89, 1IBM is valued on the expensive side.
Based on the Price/Forward Earnings ratio, 1IBM is valued a bit more expensive than 63.51% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of 1IBM to the average of the S&P500 Index (22.99), we can say 1IBM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.93 | ||
| Fwd PE | 22.89 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1IBM is valued a bit more expensive than the industry average as 78.38% of the companies are valued more cheaply.
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 64.86% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.82 | ||
| EV/EBITDA | 21.08 |
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)2.93
PEG (5Y)N/A
EPS Next 2Y7.92%
EPS Next 3Y7.16%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.33%, 1IBM has a reasonable but not impressive dividend return.
1IBM's Dividend Yield is a higher than the industry average which is at 3.93.
1IBM's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
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
106.31% of the earnings are spent on dividend by 1IBM. This is not a sustainable payout ratio.
The dividend of 1IBM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP106.31%
EPS Next 2Y7.92%
EPS Next 3Y7.16%
BIT:1IBM (10/14/2025, 7:00:00 PM)
238.05
-6.15 (-2.52%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners65.04%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap221.75B
Analysts69.63
Price Target240.73 (1.13%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
Yearly Dividend5.78
Dividend Growth(5Y)0.83%
DP106.31%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.93%
Min EPS beat(2)4.89%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)5.93%
Min EPS beat(4)2.27%
Max EPS beat(4)12.97%
EPS beat(8)8
Avg EPS beat(8)5.15%
EPS beat(12)11
Avg EPS beat(12)4.65%
EPS beat(16)14
Avg EPS beat(16)3.57%
Revenue beat(2)2
Avg Revenue beat(2)0.68%
Min Revenue beat(2)0.01%
Max Revenue beat(2)1.34%
Revenue beat(4)2
Avg Revenue beat(4)-0.31%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)1.34%
Revenue beat(8)2
Avg Revenue beat(8)-0.52%
Revenue beat(12)4
Avg Revenue beat(12)-0.27%
Revenue beat(16)7
Avg Revenue beat(16)-1.44%
PT rev (1m)0.96%
PT rev (3m)5.9%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)-0.18%
EPS NY rev (1m)0.17%
EPS NY rev (3m)1.89%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)0.25%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.93 | ||
| Fwd PE | 22.89 | ||
| P/S | 4.01 | ||
| P/FCF | 21.82 | ||
| P/OCF | 19.31 | ||
| P/B | 9.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.08 |
EPS(TTM)9.18
EY3.86%
EPS(NY)10.4
Fwd EY4.37%
FCF(TTM)10.91
FCFY4.58%
OCF(TTM)12.33
OCFY5.18%
SpS59.42
BVpS25.53
TBVpS-48.48
PEG (NY)2.93
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.93% | ||
| ROE | 21.2% | ||
| ROCE | 8.85% | ||
| ROIC | 7.55% | ||
| ROICexc | 8.78% | ||
| ROICexgc | 53.5% | ||
| OM | 15.32% | ||
| PM (TTM) | 9.11% | ||
| GM | 57.57% | ||
| FCFM | 18.36% |
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 | 2.01 | ||
| Debt/FCF | 5.46 | ||
| Debt/EBITDA | 3.77 | ||
| Cap/Depr | 31.62% | ||
| Cap/Sales | 2.38% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 90.78% | ||
| Profit Quality | 201.58% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 3.35 |
F-Score5
WACC8.46%
ROIC/WACC0.89
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)4.32%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%15.23%
EPS Next Y8.85%
EPS Next 2Y7.92%
EPS Next 3Y7.16%
EPS Next 5Y6.21%
Revenue 1Y (TTM)2.69%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%7.65%
Revenue Next Year6.38%
Revenue Next 2Y5.37%
Revenue Next 3Y5.04%
Revenue Next 5Y4.94%
EBIT growth 1Y8.54%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year72.33%
EBIT Next 3Y25.44%
EBIT Next 5Y19.31%
FCF growth 1Y14.17%
FCF growth 3Y7.1%
FCF growth 5Y0.76%
OCF growth 1Y8.18%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%