INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:IBM - US4592001014 - Common Stock
266.1 EUR
-3 (-1.11%)
Overall IBM gets a fundamental rating of 4 out of 10. We evaluated IBM against 77 industry peers in the IT Services industry. IBM has an excellent profitability rating, but there are 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.
In the past year IBM had a positive cash flow from operations.
Each year in the past 5 years IBM has been profitable.
Each year in the past 5 years IBM had a positive operating cash flow.
1.2 Ratios
The Return On Assets of IBM (5.40%) is better than 63.64% of its industry peers.
With an excellent Return On Equity value of 28.34%, IBM belongs to the best of the industry, outperforming 89.61% of the companies in the same industry.
The Return On Invested Capital of IBM (8.07%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for IBM is significantly below the industry average of 26.50%.
The last Return On Invested Capital (8.07%) for IBM 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
The Profit Margin of IBM (12.09%) is better than 92.21% of its industry peers.
IBM's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 16.06%, IBM belongs to the top of the industry, outperforming 92.21% of the companies in the same industry.
In the last couple of years the Operating Margin of IBM has remained more or less at the same level.
With a Gross Margin value of 57.81%, IBM perfoms like the industry average, outperforming 44.16% of the companies in the same industry.
In the last couple of years the Gross Margin of IBM 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
IBM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, IBM has more shares outstanding
IBM has more shares outstanding than it did 5 years ago.
IBM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.60 indicates that IBM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.60, IBM is in the better half of the industry, outperforming 75.32% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 5.27, IBM is in line with its industry, outperforming 44.16% 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.
Looking at the Debt to Equity ratio, with a value of 1.98, IBM is doing worse than 77.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.6 |
ROIC/WACC0.96
WACC8.44%
2.3 Liquidity
A Current Ratio of 0.93 indicates that IBM may have some problems paying its short term obligations.
IBM has a worse Current ratio (0.93) than 71.43% of its industry peers.
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 has a worse Quick ratio (0.89) than 71.43% 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.
Looking at the last year, IBM shows a small growth in Revenue. The Revenue has grown by 4.51% in the last 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
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 Y11.1%
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.
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
A Price/Earnings ratio of 28.28 indicates a quite expensive valuation of 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 26.34, which is the current average of the S&P500 Index.
IBM is valuated quite expensively with a Price/Forward Earnings ratio of 25.18.
IBM's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.56, IBM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.28 | ||
| Fwd PE | 25.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IBM is valued a bit more expensive than the industry average as 72.73% of the companies are valued more cheaply.
IBM's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. IBM is more expensive than 61.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.21 | ||
| EV/EBITDA | 22.04 |
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 IBM may justify a higher PE ratio.
PEG (NY)2.55
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%, IBM has a reasonable but not impressive dividend return.
IBM's Dividend Yield is a higher than the industry average which is at 3.76.
IBM'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 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 2Y9.19%
EPS Next 3Y8.11%
FRA:IBM (12/9/2025, 12:46:20 PM)
266.1
-3 (-1.11%)
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 Cap248.73B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts71.85
Price Target250.7 (-5.79%)
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 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)0.2%
PT rev (3m)4.48%
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 | 28.28 | ||
| Fwd PE | 25.18 | ||
| P/S | 4.43 | ||
| P/FCF | 24.21 | ||
| P/OCF | 21.5 | ||
| P/B | 10.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.04 |
EPS(TTM)9.41
EY3.54%
EPS(NY)10.57
Fwd EY3.97%
FCF(TTM)10.99
FCFY4.13%
OCF(TTM)12.38
OCFY4.65%
SpS60.03
BVpS25.61
TBVpS-47.01
PEG (NY)2.55
PEG (5Y)N/A
Graham Number73.64
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 | 3.6 |
F-Score6
WACC8.44%
ROIC/WACC0.96
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 / 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%.