INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
FRA:IBM • US4592001014
205.4 EUR
+1.35 (+0.66%)
Last: Mar 3, 2026, 03:58 PM
IBM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 75 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
- In the past year IBM was profitable.
- IBM had a positive operating cash flow in the past year.
- IBM had positive earnings in each of the past 5 years.
- Each year in the past 5 years IBM had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 6.97%, IBM is in the better half of the industry, outperforming 70.67% of the companies in the same industry.
- IBM's Return On Equity of 32.45% is amongst the best of the industry. IBM outperforms 89.33% of its industry peers.
- IBM's Return On Invested Capital of 6.85% is in line compared to the rest of the industry. IBM outperforms 44.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for IBM is significantly below the industry average of 11.55%.
- The last Return On Invested Capital (6.85%) for IBM is above the 3 year average (6.31%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.97% | ||
| ROE | 32.45% | ||
| ROIC | 6.85% |
ROA(3y)5.64%
ROA(5y)4.51%
ROE(3y)29.27%
ROE(5y)25.13%
ROIC(3y)6.31%
ROIC(5y)5.71%
1.3 Margins
- IBM has a Profit Margin of 15.69%. This is amongst the best in the industry. IBM outperforms 92.00% of its industry peers.
- IBM's Profit Margin has improved in the last couple of years.
- IBM's Operating Margin of 16.30% is amongst the best of the industry. IBM outperforms 92.00% of its industry peers.
- IBM's Operating Margin has improved in the last couple of years.
- The Gross Margin of IBM (58.19%) is comparable to the rest of the industry.
- IBM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.3% | ||
| PM (TTM) | 15.69% | ||
| GM | 58.19% |
OM growth 3Y10.55%
OM growth 5Y8.93%
PM growth 3Y79.59%
PM growth 5Y9.14%
GM growth 3Y2.52%
GM growth 5Y0.79%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so IBM 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.
- Compared to 1 year ago, IBM has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 3.23 indicates that IBM is not in any danger for bankruptcy at the moment.
- IBM's Altman-Z score of 3.23 is fine compared to the rest of the industry. IBM outperforms 70.67% of its industry peers.
- IBM has a debt to FCF ratio of 5.29. This is a neutral value as IBM would need 5.29 years to pay back of all of its debts.
- IBM has a Debt to FCF ratio (5.29) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 1.68 is on the high side and indicates that IBM has dependencies on debt financing.
- IBM's Debt to Equity ratio of 1.68 is on the low side compared to the rest of the industry. IBM is outperformed by 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 5.29 | ||
| Altman-Z | 3.23 |
ROIC/WACC0.8
WACC8.58%
2.3 Liquidity
- IBM has a Current Ratio of 0.96. This is a bad value and indicates that IBM is not financially healthy enough and could expect problems in meeting its short term obligations.
- IBM has a worse Current ratio (0.96) than 72.00% of its industry peers.
- IBM has a Quick Ratio of 0.96. This is a bad value and indicates that IBM is not financially healthy enough and could expect problems in meeting its short term obligations.
- IBM has a Quick ratio of 0.92. This is in the lower half of the industry: IBM underperforms 68.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
- IBM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.00%, which is quite good.
- IBM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.94% yearly.
- IBM shows a small growth in Revenue. In the last year, the Revenue has grown by 7.62%.
- The Revenue has been growing slightly by 4.12% on average over the past years.
EPS 1Y (TTM)12%
EPS 3Y8.25%
EPS 5Y5.94%
EPS Q2Q%15.31%
Revenue 1Y (TTM)7.62%
Revenue growth 3Y3.72%
Revenue growth 5Y4.12%
Sales Q2Q%12.15%
3.2 Future
- Based on estimates for the next years, IBM will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.08% on average per year.
- The Revenue is expected to grow by 5.87% on average over the next years.
EPS Next Y8.56%
EPS Next 2Y8.43%
EPS Next 3Y9.11%
EPS Next 5Y11.08%
Revenue Next Year6.15%
Revenue Next 2Y5.37%
Revenue Next 3Y5.33%
Revenue Next 5Y5.87%
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
- A Price/Earnings ratio of 20.77 indicates a rather expensive valuation of IBM.
- IBM's Price/Earnings is on the same level as the industry average.
- IBM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.13.
- With a Price/Forward Earnings ratio of 19.13, IBM is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of IBM is on the same level as its industry peers.
- Compared to an average S&P500 Price/Forward Earnings ratio of 28.11, IBM is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.77 | ||
| Fwd PE | 19.13 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, IBM is valued a bit more expensive than 74.67% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of IBM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.4 | ||
| EV/EBITDA | 16.79 |
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 IBM may justify a higher PE ratio.
PEG (NY)2.42
PEG (5Y)3.5
EPS Next 2Y8.43%
EPS Next 3Y9.11%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.78%, IBM has a reasonable but not impressive dividend return.
- The stock price of IBM dropped by -22.99% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- Compared to an average industry Dividend Yield of 2.39, IBM pays a bit more dividend than its industry peers.
- IBM's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.78% |
5.2 History
- The dividend of IBM has a limited annual growth rate of 0.63%.
Dividend Growth(5Y)0.63%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- IBM pays out 59.05% of its income as dividend. This is a bit on the high side, but may be sustainable.
- IBM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP59.05%
EPS Next 2Y8.43%
EPS Next 3Y9.11%
FRA:IBM (3/3/2026, 3:58:17 PM)
205.4
+1.35 (+0.66%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)01-28 2026-01-28/amc
Earnings (Next)04-22 2026-04-22/amc
Inst Owners64.18%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap192.00B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts73.33
Price Target300.26 (46.18%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.78% |
Yearly Dividend5.69
Dividend Growth(5Y)0.63%
DP59.05%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.44%
Min EPS beat(2)3.6%
Max EPS beat(2)7.28%
EPS beat(4)4
Avg EPS beat(4)7.19%
Min EPS beat(4)3.6%
Max EPS beat(4)12.97%
EPS beat(8)8
Avg EPS beat(8)6.03%
EPS beat(12)12
Avg EPS beat(12)5.55%
EPS beat(16)15
Avg EPS beat(16)4.22%
Revenue beat(2)2
Avg Revenue beat(2)0.94%
Min Revenue beat(2)0.5%
Max Revenue beat(2)1.37%
Revenue beat(4)4
Avg Revenue beat(4)0.81%
Min Revenue beat(4)0.01%
Max Revenue beat(4)1.37%
Revenue beat(8)4
Avg Revenue beat(8)-0.12%
Revenue beat(12)4
Avg Revenue beat(12)-0.46%
Revenue beat(16)8
Avg Revenue beat(16)0.09%
PT rev (1m)19.95%
PT rev (3m)21.9%
EPS NQ rev (1m)-2.85%
EPS NQ rev (3m)-3.78%
EPS NY rev (1m)1.96%
EPS NY rev (3m)2.32%
Revenue NQ rev (1m)0.54%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)1.46%
Revenue NY rev (3m)1.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.77 | ||
| Fwd PE | 19.13 | ||
| P/S | 3.33 | ||
| P/FCF | 19.4 | ||
| P/OCF | 17.02 | ||
| P/B | 6.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.79 |
EPS(TTM)9.89
EY4.81%
EPS(NY)10.74
Fwd EY5.23%
FCF(TTM)10.59
FCFY5.15%
OCF(TTM)12.07
OCFY5.87%
SpS61.76
BVpS29.86
TBVpS-42.49
PEG (NY)2.42
PEG (5Y)3.5
Graham Number81.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.97% | ||
| ROE | 32.45% | ||
| ROCE | 9.72% | ||
| ROIC | 6.85% | ||
| ROICexc | 7.84% | ||
| ROICexgc | 39.35% | ||
| OM | 16.3% | ||
| PM (TTM) | 15.69% | ||
| GM | 58.19% | ||
| FCFM | 17.14% |
ROA(3y)5.64%
ROA(5y)4.51%
ROE(3y)29.27%
ROE(5y)25.13%
ROIC(3y)6.31%
ROIC(5y)5.71%
ROICexc(3y)7.28%
ROICexc(5y)6.47%
ROICexgc(3y)37.08%
ROICexgc(5y)31.05%
ROCE(3y)8.97%
ROCE(5y)8.11%
ROICexgc growth 3Y15%
ROICexgc growth 5Y27.2%
ROICexc growth 3Y9.9%
ROICexc growth 5Y14.25%
OM growth 3Y10.55%
OM growth 5Y8.93%
PM growth 3Y79.59%
PM growth 5Y9.14%
GM growth 3Y2.52%
GM growth 5Y0.79%
F-Score6
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 5.29 | ||
| Debt/EBITDA | 3.42 | ||
| Cap/Depr | 32.2% | ||
| Cap/Sales | 2.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.3% | ||
| Profit Quality | 109.28% | ||
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.92 | ||
| Altman-Z | 3.23 |
F-Score6
WACC8.58%
ROIC/WACC0.8
Cap/Depr(3y)36.49%
Cap/Depr(5y)38.74%
Cap/Sales(3y)2.67%
Cap/Sales(5y)3.22%
Profit Quality(3y)155.37%
Profit Quality(5y)231.43%
High Growth Momentum
Growth
EPS 1Y (TTM)12%
EPS 3Y8.25%
EPS 5Y5.94%
EPS Q2Q%15.31%
EPS Next Y8.56%
EPS Next 2Y8.43%
EPS Next 3Y9.11%
EPS Next 5Y11.08%
Revenue 1Y (TTM)7.62%
Revenue growth 3Y3.72%
Revenue growth 5Y4.12%
Sales Q2Q%12.15%
Revenue Next Year6.15%
Revenue Next 2Y5.37%
Revenue Next 3Y5.33%
Revenue Next 5Y5.87%
EBIT growth 1Y20.21%
EBIT growth 3Y14.66%
EBIT growth 5Y13.42%
EBIT Next Year50.69%
EBIT Next 3Y18.76%
EBIT Next 5Y16.19%
FCF growth 1Y-1.57%
FCF growth 3Y11%
FCF growth 5Y-5.01%
OCF growth 1Y-1.88%
OCF growth 3Y8.13%
OCF growth 5Y-6.23%
INTL BUSINESS MACHINES CORP / IBM.DE FAQ
What is the fundamental rating for IBM stock?
ChartMill assigns a fundamental rating of 5 / 10 to IBM.DE.
What is the valuation status of INTL BUSINESS MACHINES CORP (IBM.DE) stock?
ChartMill assigns a valuation rating of 3 / 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 20.77 and the Price/Book (PB) ratio is 6.88.
Can you provide the financial health for IBM stock?
The financial health rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 2 / 10.