INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1IBM - US4592001014 - Common Stock
255.3 EUR
-21.3 (-7.7%)
Overall 1IBM gets a fundamental rating of 4 out of 10. We evaluated 1IBM against 77 industry peers in the IT Services industry. 1IBM scores excellent on profitability, but there are concerns on its financial health. 1IBM is valied quite expensively at the moment, while it does show a decent growth rate.
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.
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
1IBM has a better Return On Assets (5.40%) than 64.38% of its industry peers.
1IBM has a Return On Equity of 28.34%. This is amongst the best in the industry. 1IBM outperforms 90.41% of its industry peers.
1IBM has a Return On Invested Capital (8.07%) which is comparable to the rest of the industry.
1IBM had an Average Return On Invested Capital over the past 3 years of 7.07%. This is significantly below the industry average of 26.09%.
The last Return On Invested Capital (8.07%) for 1IBM is above the 3 year average (7.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.4% | ||
| ROE | 28.34% | ||
| ROIC | 8.07% |
ROA(3y)3.74%
ROA(5y)3.83%
ROE(3y)20.94%
ROE(5y)24.07%
ROIC(3y)7.07%
ROIC(5y)6.14%
1.3 Margins
1IBM has a Profit Margin of 12.09%. This is amongst the best in the industry. 1IBM outperforms 91.78% of its industry peers.
In the last couple of years the Profit Margin of 1IBM has declined.
With an excellent Operating Margin value of 16.06%, 1IBM belongs to the best of the industry, outperforming 90.41% of the companies in the same industry.
In the last couple of years the Operating Margin of 1IBM has remained more or less at the same level.
The Gross Margin of 1IBM (57.81%) 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 | 16.06% | ||
| PM (TTM) | 12.09% | ||
| GM | 57.81% |
OM growth 3Y10.6%
OM growth 5Y0.28%
PM growth 3Y-1.4%
PM growth 5Y-10.1%
GM growth 3Y1.05%
GM growth 5Y0.73%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 1IBM is destroying value.
1IBM has more shares outstanding than it did 1 year ago.
1IBM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, 1IBM has an improved debt to assets ratio.
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 78.08% of the companies in the same industry.
1IBM has a debt to FCF ratio of 5.27. This is a neutral value as 1IBM would need 5.27 years to pay back of all of its debts.
With a Debt to FCF ratio value of 5.27, 1IBM perfoms like the industry average, outperforming 45.21% of the companies in the same industry.
1IBM has a Debt/Equity ratio of 1.98. This is a high value indicating a heavy dependency on external financing.
1IBM's Debt to Equity ratio of 1.98 is on the low side compared to the rest of the industry. 1IBM is outperformed by 80.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.52 |
ROIC/WACC0.98
WACC8.26%
2.3 Liquidity
A Current Ratio of 0.93 indicates that 1IBM may have some problems paying its short term obligations.
With a Current ratio value of 0.93, 1IBM is not doing good in the industry: 73.97% of the companies in the same industry are doing better.
1IBM has a Quick Ratio of 0.93. 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 worse Quick ratio (0.89) than 72.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.71% 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 4.51% in the past year.
The Revenue has been growing slightly by 1.69% on average over the past years.
EPS 1Y (TTM)6.71%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%15.22%
Revenue 1Y (TTM)4.51%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%9.11%
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 6.07% on average per year.
Based on estimates for the next years, 1IBM will show a small growth in Revenue. The Revenue will grow by 5.12% on average per year.
EPS Next Y11.1%
EPS Next 2Y9.19%
EPS Next 3Y8.11%
EPS Next 5Y6.07%
Revenue Next Year6.83%
Revenue Next 2Y5.7%
Revenue Next 3Y5.23%
Revenue Next 5Y5.12%
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
Based on the Price/Earnings ratio of 27.10, the valuation of 1IBM can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of 1IBM is on the same level as its industry peers.
1IBM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.49, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 24.14 indicates a rather expensive valuation of 1IBM.
Based on the Price/Forward Earnings ratio, 1IBM is valued a bit more expensive than the industry average as 61.64% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.69, 1IBM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.1 | ||
| Fwd PE | 24.14 |
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 73.97% 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 64.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.21 | ||
| EV/EBITDA | 21.04 |
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)2.44
PEG (5Y)N/A
EPS Next 2Y9.19%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.18%, 1IBM has a reasonable but not impressive dividend return.
1IBM's Dividend Yield is comparable with the industry average which is at 3.76.
1IBM's Dividend Yield is comparable with the S&P500 average which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
5.2 History
The dividend of 1IBM has a limited annual growth rate of 0.81%.
Dividend Growth(5Y)0.81%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
78.75% 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.
DP78.75%
EPS Next 2Y9.19%
EPS Next 3Y8.11%
BIT:1IBM (11/20/2025, 7:00:00 PM)
255.3
-21.3 (-7.7%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners64.13%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap238.64B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts71.85
Price Target250.56 (-1.86%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
Yearly Dividend5.73
Dividend Growth(5Y)0.81%
DP78.75%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.08%
Min EPS beat(2)4.89%
Max EPS beat(2)7.28%
EPS beat(4)4
Avg EPS beat(4)7.18%
Min EPS beat(4)3.59%
Max EPS beat(4)12.97%
EPS beat(8)8
Avg EPS beat(8)5.75%
EPS beat(12)11
Avg EPS beat(12)5.17%
EPS beat(16)15
Avg EPS beat(16)4.03%
Revenue beat(2)2
Avg Revenue beat(2)0.92%
Min Revenue beat(2)0.5%
Max Revenue beat(2)1.34%
Revenue beat(4)3
Avg Revenue beat(4)0.23%
Min Revenue beat(4)-0.93%
Max Revenue beat(4)1.34%
Revenue beat(8)3
Avg Revenue beat(8)-0.35%
Revenue beat(12)4
Avg Revenue beat(12)-0.51%
Revenue beat(16)8
Avg Revenue beat(16)0.23%
PT rev (1m)4.08%
PT rev (3m)5.08%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)0%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)2.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.11%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.1 | ||
| Fwd PE | 24.14 | ||
| P/S | 4.25 | ||
| P/FCF | 23.21 | ||
| P/OCF | 20.61 | ||
| P/B | 9.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.04 |
EPS(TTM)9.42
EY3.69%
EPS(NY)10.58
Fwd EY4.14%
FCF(TTM)11
FCFY4.31%
OCF(TTM)12.39
OCFY4.85%
SpS60.09
BVpS25.64
TBVpS-47.06
PEG (NY)2.44
PEG (5Y)N/A
Graham Number73.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.4% | ||
| ROE | 28.34% | ||
| ROCE | 9.45% | ||
| ROIC | 8.07% | ||
| ROICexc | 9.31% | ||
| ROICexgc | 52.18% | ||
| OM | 16.06% | ||
| PM (TTM) | 12.09% | ||
| GM | 57.81% | ||
| FCFM | 18.31% |
ROA(3y)3.74%
ROA(5y)3.83%
ROE(3y)20.94%
ROE(5y)24.07%
ROIC(3y)7.07%
ROIC(5y)6.14%
ROICexc(3y)8.07%
ROICexc(5y)6.94%
ROICexgc(3y)39.64%
ROICexgc(5y)31.12%
ROCE(3y)8.28%
ROCE(5y)7.2%
ROICexgc growth 3Y23.43%
ROICexgc growth 5Y15.29%
ROICexc growth 3Y14.68%
ROICexc growth 5Y5.67%
OM growth 3Y10.6%
OM growth 5Y0.28%
PM growth 3Y-1.4%
PM growth 5Y-10.1%
GM growth 3Y1.05%
GM growth 5Y0.73%
F-Score6
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Debt/EBITDA | 3.6 | ||
| Cap/Depr | 31.23% | ||
| Cap/Sales | 2.31% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.87% | ||
| Profit Quality | 151.41% | ||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 3.52 |
F-Score6
WACC8.26%
ROIC/WACC0.98
Cap/Depr(3y)39.45%
Cap/Depr(5y)41.95%
Cap/Sales(3y)2.96%
Cap/Sales(5y)3.91%
Profit Quality(3y)291.08%
Profit Quality(5y)263.12%
High Growth Momentum
Growth
EPS 1Y (TTM)6.71%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%15.22%
EPS Next Y11.1%
EPS Next 2Y9.19%
EPS Next 3Y8.11%
EPS Next 5Y6.07%
Revenue 1Y (TTM)4.51%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%9.11%
Revenue Next Year6.83%
Revenue Next 2Y5.7%
Revenue Next 3Y5.23%
Revenue Next 5Y5.12%
EBIT growth 1Y14.74%
EBIT growth 3Y13.97%
EBIT growth 5Y1.98%
EBIT Next Year73.84%
EBIT Next 3Y24.02%
EBIT Next 5Y17.21%
FCF growth 1Y3.97%
FCF growth 3Y5.46%
FCF growth 5Y-0.17%
OCF growth 1Y0.37%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%
INTL BUSINESS MACHINES CORP / 1IBM.MI FAQ
What is the ChartMill fundamental rating of INTL BUSINESS MACHINES CORP (1IBM.MI) stock?
ChartMill assigns a fundamental rating of 4 / 10 to 1IBM.MI.
Can you provide the valuation status for INTL BUSINESS MACHINES CORP?
ChartMill assigns a valuation rating of 2 / 10 to INTL BUSINESS MACHINES CORP (1IBM.MI). This can be considered as Overvalued.
How profitable is INTL BUSINESS MACHINES CORP (1IBM.MI) stock?
INTL BUSINESS MACHINES CORP (1IBM.MI) has a profitability rating of 7 / 10.
What are the PE and PB ratios of INTL BUSINESS MACHINES CORP (1IBM.MI) stock?
The Price/Earnings (PE) ratio for INTL BUSINESS MACHINES CORP (1IBM.MI) is 27.1 and the Price/Book (PB) ratio is 9.96.
How sustainable is the dividend of INTL BUSINESS MACHINES CORP (1IBM.MI) stock?
The dividend rating of INTL BUSINESS MACHINES CORP (1IBM.MI) is 4 / 10 and the dividend payout ratio is 78.75%.