INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:IBM - US4592001014 - Common Stock
252.7 EUR
+0.8 (+0.32%)
IBM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 76 industry peers in the IT Services industry. While IBM has a great profitability rating, there are quite some concerns on its financial health. IBM is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- IBM had positive earnings in the past year.
- IBM had a positive operating cash flow in the past year.
- In the past 5 years IBM has always been profitable.
- In the past 5 years IBM always reported a positive cash flow from operatings.
1.2 Ratios
- IBM has a Return On Assets of 5.40%. This is in the better half of the industry: IBM outperforms 60.53% of its industry peers.
- IBM's Return On Equity of 28.34% is amongst the best of the industry. IBM outperforms 88.16% of its industry peers.
- IBM has a Return On Invested Capital of 8.07%. This is comparable to the rest of the industry: IBM outperforms 44.74% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for IBM is significantly below the industry average of 25.98%.
- The 3 year average ROIC (7.07%) for IBM is below the current ROIC(8.07%), indicating increased profibility in the last year.
| 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
- With an excellent Profit Margin value of 12.09%, IBM belongs to the best of the industry, outperforming 92.11% of the companies in the same industry.
- In the last couple of years the Profit Margin of IBM has declined.
- IBM has a better Operating Margin (16.06%) than 90.79% of its industry peers.
- In the last couple of years the Operating Margin of IBM has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 57.81%, IBM is in line with its industry, outperforming 42.11% of the companies in the same industry.
- IBM's Gross Margin has been stable in the last couple of years.
| 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
- IBM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- IBM has more shares outstanding than it did 1 year ago.
- IBM has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for IBM has been reduced compared to a year ago.
2.2 Solvency
- IBM has an Altman-Z score of 3.51. This indicates that IBM is financially healthy and has little risk of bankruptcy at the moment.
- IBM has a Altman-Z score of 3.51. This is in the better half of the industry: IBM outperforms 72.37% of its industry peers.
- IBM has a debt to FCF ratio of 5.27. This is a neutral value as IBM would need 5.27 years to pay back of all of its debts.
- The Debt to FCF ratio of IBM (5.27) is comparable to the rest of the industry.
- IBM has a Debt/Equity ratio of 1.98. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.98, IBM is not doing good in the industry: 82.89% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.51 |
ROIC/WACC0.92
WACC8.81%
2.3 Liquidity
- A Current Ratio of 0.93 indicates that IBM may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.93, IBM is doing worse than 76.32% of the companies in the same industry.
- A Quick Ratio of 0.89 indicates that IBM may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.89, IBM is doing worse than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
- IBM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.71%.
- IBM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.21% yearly.
- The Revenue has been growing slightly by 4.51% in the past year.
- Measured over the past years, IBM shows a small growth in Revenue. The Revenue has been growing by 1.69% on average per year.
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
- The Earnings Per Share is expected to grow by 6.07% on average over the next years.
- Based on estimates for the next years, IBM will show a small growth in Revenue. The Revenue will grow by 5.12% on average per year.
EPS Next Y11%
EPS Next 2Y9.2%
EPS Next 3Y8.19%
EPS Next 5Y6.07%
Revenue Next Year6.82%
Revenue Next 2Y5.75%
Revenue Next 3Y5.24%
Revenue Next 5Y5.12%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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
- The Price/Earnings ratio is 27.03, which means the current valuation is very expensive for IBM.
- The rest of the industry has a similar Price/Earnings ratio as IBM.
- The average S&P500 Price/Earnings ratio is at 27.32. IBM is around the same levels.
- Based on the Price/Forward Earnings ratio of 24.06, the valuation of IBM can be described as rather expensive.
- IBM's Price/Forward Earnings is on the same level as the industry average.
- IBM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.03 | ||
| Fwd PE | 24.06 |
4.2 Price Multiples
- IBM's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. IBM is more expensive than 76.32% of the companies in the same industry.
- IBM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.14 | ||
| EV/EBITDA | 20.93 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- IBM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.46
PEG (5Y)N/A
EPS Next 2Y9.2%
EPS Next 3Y8.19%
5. Dividend
5.1 Amount
- IBM has a Yearly Dividend Yield of 2.26%.
- IBM's Dividend Yield is a higher than the industry average which is at 2.10.
- IBM's Dividend Yield is a higher than the S&P500 average which is at 1.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
5.2 History
- The dividend of IBM has a limited annual growth rate of 0.81%.
Dividend Growth(5Y)0.81%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- 78.75% of the earnings are spent on dividend by IBM. This is not a sustainable payout ratio.
- The dividend of IBM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP78.75%
EPS Next 2Y9.2%
EPS Next 3Y8.19%
FRA:IBM (1/21/2026, 5:11:19 PM)
252.7
+0.8 (+0.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)10-22 2025-10-22/amc
Earnings (Next)01-28 2026-01-28/amc
Inst Owners64.18%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap236.21B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts71.85
Price Target250.33 (-0.94%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
Yearly Dividend5.75
Dividend Growth(5Y)0.81%
DP78.75%
Div Incr Years6
Div Non Decr Years6
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)-0.15%
PT rev (3m)3.98%
EPS NQ rev (1m)-0.34%
EPS NQ rev (3m)-0.75%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)1.98%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)0.01%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.03 | ||
| Fwd PE | 24.06 | ||
| P/S | 4.24 | ||
| P/FCF | 23.14 | ||
| P/OCF | 20.55 | ||
| P/B | 9.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.93 |
EPS(TTM)9.35
EY3.7%
EPS(NY)10.5
Fwd EY4.16%
FCF(TTM)10.92
FCFY4.32%
OCF(TTM)12.3
OCFY4.87%
SpS59.66
BVpS25.45
TBVpS-46.72
PEG (NY)2.46
PEG (5Y)N/A
Graham Number73.18
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 | 3.51 |
F-Score6
WACC8.81%
ROIC/WACC0.92
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%
EPS Next 2Y9.2%
EPS Next 3Y8.19%
EPS Next 5Y6.07%
Revenue 1Y (TTM)4.51%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%9.11%
Revenue Next Year6.82%
Revenue Next 2Y5.75%
Revenue Next 3Y5.24%
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 / IBM.DE FAQ
What is the fundamental rating for IBM stock?
ChartMill assigns a fundamental rating of 4 / 10 to IBM.DE.
What is the valuation status of INTL BUSINESS MACHINES CORP (IBM.DE) stock?
ChartMill assigns a valuation rating of 2 / 10 to INTL BUSINESS MACHINES CORP (IBM.DE). This can be considered as Overvalued.
How profitable is INTL BUSINESS MACHINES CORP (IBM.DE) stock?
INTL BUSINESS MACHINES CORP (IBM.DE) has a profitability rating of 7 / 10.
What are the PE and PB ratios of INTL BUSINESS MACHINES CORP (IBM.DE) stock?
The Price/Earnings (PE) ratio for INTL BUSINESS MACHINES CORP (IBM.DE) is 27.03 and the Price/Book (PB) ratio is 9.93.
Can you provide the financial health for IBM stock?
The financial health rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 3 / 10.