INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
Europe - BIT:1IBM - US4592001014 - Common Stock
213 EUR
+7.45 (+3.62%)
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 has a great profitability rating, there are quite some 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.
Each year in the past 5 years 1IBM had a positive operating cash flow.
1.2 Ratios
1IBM's Return On Assets of 3.93% is in line compared to the rest of the industry. 1IBM outperforms 47.89% of its industry peers.
With an excellent Return On Equity value of 21.20%, 1IBM belongs to the best of the industry, outperforming 84.51% of the companies in the same industry.
With a Return On Invested Capital value of 7.55%, 1IBM perfoms like the industry average, outperforming 46.48% 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 11.13%.
The last Return On Invested Capital (7.55%) for 1IBM is above the 3 year average (7.26%), which is a sign of increasing profitability.
| 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's Profit Margin of 9.11% is amongst the best of the industry. 1IBM outperforms 87.32% 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 91.55% 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.
The number of shares outstanding for 1IBM has been increased compared to 1 year ago.
Compared to 5 years ago, 1IBM has more shares outstanding
The debt/assets ratio for 1IBM has been reduced compared to a year ago.
2.2 Solvency
1IBM has an Altman-Z score of 3.20. This indicates that 1IBM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of 1IBM (3.20) is better than 66.20% 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.
With a Debt to FCF ratio value of 5.46, 1IBM is not doing good in the industry: 60.56% of the companies in the same industry are doing better.
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 81.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.01 | ||
| Debt/FCF | 5.46 | ||
| Altman-Z | 3.2 |
ROIC/WACC0.86
WACC8.82%
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 78.87% of its industry peers.
A Quick Ratio of 0.87 indicates that 1IBM may have some problems paying its short term obligations.
1IBM has a Quick ratio of 0.87. This is in the lower half of the industry: 1IBM underperforms 78.87% 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.
Measured over the past years, 1IBM shows a decrease in Earnings Per Share. The EPS has been decreasing by -4.21% on average per year.
1IBM shows a small growth in Revenue. In the last year, the Revenue has grown by 2.69%.
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.
Based on estimates for the next years, 1IBM will show a small growth in Revenue. The Revenue will grow by 4.94% on average per year.
EPS Next Y8.66%
EPS Next 2Y7.71%
EPS Next 3Y6.93%
EPS Next 5Y6.21%
Revenue Next Year6.36%
Revenue Next 2Y5.36%
Revenue Next 3Y5.02%
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.
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
Based on the Price/Earnings ratio of 23.51, the valuation of 1IBM can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as 1IBM.
1IBM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 20.83, 1IBM is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of 1IBM is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of 1IBM to the average of the S&P500 Index (22.73), we can say 1IBM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.51 | ||
| Fwd PE | 20.83 |
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 74.65% of the companies listed in the same industry.
1IBM's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. 1IBM is more expensive than 60.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.77 | ||
| EV/EBITDA | 18.98 |
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)2.71
PEG (5Y)N/A
EPS Next 2Y7.71%
EPS Next 3Y6.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.61%, 1IBM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 7.63, 1IBM pays a bit more dividend than its industry peers.
1IBM's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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 106.31% 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.
DP106.31%
EPS Next 2Y7.71%
EPS Next 3Y6.93%
BIT:1IBM (9/4/2025, 7:00:00 PM)
213
+7.45 (+3.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners65.2%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap198.41B
Analysts70
Price Target238.77 (12.1%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
Yearly Dividend5.7
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)-0.94%
PT rev (3m)6.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.32%
EPS NY rev (1m)1.96%
EPS NY rev (3m)1.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.89%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.51 | ||
| Fwd PE | 20.83 | ||
| P/S | 3.63 | ||
| P/FCF | 19.77 | ||
| P/OCF | 17.5 | ||
| P/B | 8.45 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.98 |
EPS(TTM)9.06
EY4.25%
EPS(NY)10.23
Fwd EY4.8%
FCF(TTM)10.77
FCFY5.06%
OCF(TTM)12.17
OCFY5.71%
SpS58.67
BVpS25.2
TBVpS-47.87
PEG (NY)2.71
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 | 3.2 |
F-Score5
WACC8.82%
ROIC/WACC0.86
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 Y8.66%
EPS Next 2Y7.71%
EPS Next 3Y6.93%
EPS Next 5Y6.21%
Revenue 1Y (TTM)2.69%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%7.65%
Revenue Next Year6.36%
Revenue Next 2Y5.36%
Revenue Next 3Y5.02%
Revenue Next 5Y4.94%
EBIT growth 1Y8.54%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year72.78%
EBIT Next 3Y26.23%
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%