INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
Europe - FRA:IBM - US4592001014 - Common Stock
259.65 EUR
-7.25 (-2.72%)
IBM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 70 industry peers in the IT Services industry. While IBM belongs to the best of the industry regarding profitability, there are concerns on its financial health. IBM is quite expensive at the moment. 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.
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
With a decent Return On Assets value of 5.40%, IBM is doing good in the industry, outperforming 64.29% of the companies in the same industry.
Looking at the Return On Equity, with a value of 28.34%, IBM belongs to the top of the industry, outperforming 88.57% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.07%, IBM is in line with its industry, outperforming 44.29% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for IBM is below the industry average of 11.69%.
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
The Profit Margin of IBM (12.09%) is better than 92.86% of its industry peers.
In the last couple of years the Profit Margin of IBM has declined.
IBM has a Operating Margin of 16.06%. This is amongst the best in the industry. IBM outperforms 92.86% of its industry peers.
IBM's Operating Margin has been stable in the last couple of years.
IBM has a Gross Margin (57.81%) which is in line with its industry peers.
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
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.
The number of shares outstanding for IBM has been increased compared to 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 3.58. This indicates that IBM is financially healthy and has little risk of bankruptcy at the moment.
IBM has a better Altman-Z score (3.58) than 77.14% of its industry peers.
The Debt to FCF ratio of IBM is 5.27, which is a neutral value as it means it would take IBM, 5.27 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 5.27, IBM perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
A Debt/Equity ratio of 1.98 is on the high side and indicates that IBM has dependencies on debt financing.
IBM has a worse Debt to Equity ratio (1.98) than 81.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.58 |
ROIC/WACC0.95
WACC8.45%
2.3 Liquidity
IBM has a Current Ratio of 0.93. This is a bad value and indicates that IBM is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.93, IBM is doing worse than 72.86% of the companies in the same industry.
IBM has a Quick Ratio of 0.93. 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's Quick ratio of 0.89 is on the low side compared to the rest of the industry. IBM is outperformed by 74.29% of its industry peers.
| 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%.
Measured over the past years, IBM shows a decrease in Earnings Per Share. The EPS has been decreasing by -4.21% on average per year.
IBM shows a small growth in Revenue. In the last year, the Revenue has grown by 4.51%.
IBM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
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
IBM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.07% yearly.
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 Y11.14%
EPS Next 2Y9.01%
EPS Next 3Y7.8%
EPS Next 5Y6.07%
Revenue Next Year6.83%
Revenue Next 2Y5.65%
Revenue Next 3Y5.19%
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.
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
The Price/Earnings ratio is 27.51, which means the current valuation is very expensive for IBM.
IBM's Price/Earnings ratio is in line with the industry average.
IBM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.91, which is the current average of the S&P500 Index.
IBM is valuated rather expensively with a Price/Forward Earnings ratio of 24.57.
IBM's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. IBM is more expensive than 64.29% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 34.57. IBM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.51 | ||
| Fwd PE | 24.57 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of IBM indicates a slightly more expensive valuation: IBM is more expensive than 75.71% of the companies listed in the same industry.
IBM's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. IBM is more expensive than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.47 | ||
| EV/EBITDA | 21.76 |
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)2.47
PEG (5Y)N/A
EPS Next 2Y9.01%
EPS Next 3Y7.8%
5. Dividend
5.1 Amount
IBM has a Yearly Dividend Yield of 2.15%.
Compared to an average industry Dividend Yield of 3.87, IBM has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, IBM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.15% |
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
IBM pays out 78.75% of its income as dividend. This is not a sustainable payout ratio.
IBM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP78.75%
EPS Next 2Y9.01%
EPS Next 3Y7.8%
FRA:IBM (11/14/2025, 1:21:05 PM)
259.65
-7.25 (-2.72%)
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 Cap241.87B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts70.37
Price Target244.88 (-5.69%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.15% |
Yearly Dividend5.78
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)1.72%
PT rev (3m)5.4%
EPS NQ rev (1m)-0.45%
EPS NQ rev (3m)-0.04%
EPS NY rev (1m)2.1%
EPS NY rev (3m)4.28%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.11%
Revenue NY rev (1m)0.42%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.51 | ||
| Fwd PE | 24.57 | ||
| P/S | 4.3 | ||
| P/FCF | 23.47 | ||
| P/OCF | 20.84 | ||
| P/B | 10.07 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.76 |
EPS(TTM)9.44
EY3.64%
EPS(NY)10.57
Fwd EY4.07%
FCF(TTM)11.06
FCFY4.26%
OCF(TTM)12.46
OCFY4.8%
SpS60.43
BVpS25.78
TBVpS-47.32
PEG (NY)2.47
PEG (5Y)N/A
Graham Number74
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 | 3.58 |
F-Score6
WACC8.45%
ROIC/WACC0.95
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 Y11.14%
EPS Next 2Y9.01%
EPS Next 3Y7.8%
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 2Y5.65%
Revenue Next 3Y5.19%
Revenue Next 5Y5.12%
EBIT growth 1Y14.74%
EBIT growth 3Y13.97%
EBIT growth 5Y1.98%
EBIT Next Year72.33%
EBIT Next 3Y25.44%
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 for IBM 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.
How financially healthy is INTL BUSINESS MACHINES CORP?
The financial health rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 3 / 10.
Is the dividend of INTL BUSINESS MACHINES CORP sustainable?
The dividend rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 4 / 10 and the dividend payout ratio is 78.75%.