INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
FRA:IBM • US4592001014
218 EUR
-0.6 (-0.27%)
Last: Feb 20, 2026, 04:01 PM
We assign a fundamental rating of 4 out of 10 to IBM. IBM was compared to 71 industry peers in the IT Services industry. IBM scores excellent on profitability, 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.
- IBM had a positive operating cash flow in the past year.
- In the past 5 years IBM has always been profitable.
- IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of IBM (6.97%) is better than 70.42% of its industry peers.
- Looking at the Return On Equity, with a value of 32.45%, IBM belongs to the top of the industry, outperforming 90.14% of the companies in the same industry.
- IBM has a Return On Invested Capital (6.85%) which is in line with its industry peers.
- The Average Return On Invested Capital over the past 3 years for IBM is below the industry average of 11.09%.
- 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 92.96% of its industry peers.
- In the last couple of years the Profit Margin of IBM has grown nicely.
- With an excellent Operating Margin value of 16.30%, IBM belongs to the best of the industry, outperforming 92.96% of the companies in the same industry.
- 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.
- 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 | 16.3% | ||
| 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.
- The number of shares outstanding for IBM has been increased compared to 1 year ago.
- IBM has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for IBM is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 3.31 indicates that IBM is not in any danger for bankruptcy at the moment.
- IBM's Altman-Z score of 3.31 is fine compared to the rest of the industry. IBM outperforms 69.01% of its industry peers.
- The Debt to FCF ratio of IBM is 5.29, which is a neutral value as it means it would take IBM, 5.29 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 5.29, IBM perfoms like the industry average, outperforming 43.66% of the companies in the same industry.
- IBM has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of IBM (1.68) is worse than 80.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 5.29 | ||
| Altman-Z | 3.31 |
ROIC/WACC0.76
WACC9.03%
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's Current ratio of 0.96 is on the low side compared to the rest of the industry. IBM is outperformed by 73.24% of its industry peers.
- A Quick Ratio of 0.92 indicates that IBM may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.92, IBM is doing worse than 70.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 12.00% over the past year.
- The Earnings Per Share has been growing slightly by 5.94% on average over the past years.
- The Revenue has been growing slightly by 7.62% in the past year.
- 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.
- Based on estimates for the next years, IBM will show a small growth in Revenue. The Revenue will grow by 5.87% on average per year.
EPS Next Y8.56%
EPS Next 2Y8.43%
EPS Next 3Y9.11%
EPS Next 5Y11.08%
Revenue Next Year6.14%
Revenue Next 2Y5.37%
Revenue Next 3Y5.33%
Revenue Next 5Y5.87%
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
- Based on the Price/Earnings ratio of 22.15, the valuation of IBM can be described as rather expensive.
- The rest of the industry has a similar Price/Earnings ratio as IBM.
- IBM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.09.
- With a Price/Forward Earnings ratio of 20.40, IBM is valued on the expensive side.
- The rest of the industry has a similar Price/Forward Earnings ratio as IBM.
- When comparing the Price/Forward Earnings ratio of IBM to the average of the S&P500 Index (27.98), we can say IBM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.15 | ||
| Fwd PE | 20.4 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, IBM is valued a bit more expensive than the industry average as 71.83% of the companies are valued more cheaply.
- IBM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.69 | ||
| EV/EBITDA | 17.85 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates IBM does not grow enough to justify the current Price/Earnings ratio.
- IBM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.59
PEG (5Y)3.73
EPS Next 2Y8.43%
EPS Next 3Y9.11%
5. Dividend
5.1 Amount
- IBM has a Yearly Dividend Yield of 2.59%. Purely for dividend investing, there may be better candidates out there.
- IBM's Dividend Yield is comparable with the industry average which is at 2.64.
- Compared to an average S&P500 Dividend Yield of 1.85, IBM pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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.
- The dividend of IBM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP59.05%
EPS Next 2Y8.43%
EPS Next 3Y9.11%
FRA:IBM (2/20/2026, 4:01:48 PM)
218
-0.6 (-0.27%)
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 Cap203.77B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts73.33
Price Target270.91 (24.27%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
Yearly Dividend5.67
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)7.65%
PT rev (3m)10.63%
EPS NQ rev (1m)-2.85%
EPS NQ rev (3m)-3.92%
EPS NY rev (1m)1.96%
EPS NY rev (3m)2.32%
Revenue NQ rev (1m)0.54%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)1.37%
Revenue NY rev (3m)1.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.15 | ||
| Fwd PE | 20.4 | ||
| P/S | 3.55 | ||
| P/FCF | 20.69 | ||
| P/OCF | 18.15 | ||
| P/B | 7.34 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.85 |
EPS(TTM)9.84
EY4.51%
EPS(NY)10.69
Fwd EY4.9%
FCF(TTM)10.54
FCFY4.83%
OCF(TTM)12.01
OCFY5.51%
SpS61.47
BVpS29.72
TBVpS-42.29
PEG (NY)2.59
PEG (5Y)3.73
Graham Number81.11
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 | 3.31 |
F-Score6
WACC9.03%
ROIC/WACC0.76
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 Year6.14%
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 Year45.85%
EBIT Next 3Y16.75%
EBIT Next 5Y16.03%
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 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 22.15 and the Price/Book (PB) ratio is 7.34.
Can you provide the financial health for IBM stock?
The financial health rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 2 / 10.