INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis

Europe • Frankfurt Stock Exchange • FRA:IBM • US4592001014

251.8 EUR
+5.65 (+2.3%)
Last: Feb 6, 2026, 07:00 PM
Fundamental Rating

4

Overall IBM gets a fundamental rating of 4 out of 10. We evaluated IBM against 74 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.


Dividend Valuation Growth Profitability Health

7

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.
  • IBM had positive earnings in each of the past 5 years.
  • In the past 5 years IBM always reported a positive cash flow from operatings.
IBM.DE Yearly Net Income VS EBIT VS OCF VS FCFIBM.DE Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

1.2 Ratios

  • With a decent Return On Assets value of 6.97%, IBM is doing good in the industry, outperforming 70.27% of the companies in the same industry.
  • Looking at the Return On Equity, with a value of 32.45%, IBM belongs to the top of the industry, outperforming 90.54% of the companies in the same industry.
  • IBM has a Return On Invested Capital of 6.85%. This is comparable to the rest of the industry: IBM outperforms 44.59% of its industry peers.
  • IBM had an Average Return On Invested Capital over the past 3 years of 6.31%. This is significantly below the industry average of 26.58%.
  • 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 RankSector 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%
IBM.DE Yearly ROA, ROE, ROICIBM.DE Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60

1.3 Margins

  • IBM's Profit Margin of 15.69% is amongst the best of the industry. IBM outperforms 91.89% of its industry peers.
  • IBM's Profit Margin has improved in the last couple of years.
  • Looking at the Operating Margin, with a value of 16.30%, IBM belongs to the top of the industry, outperforming 91.89% of the companies in the same industry.
  • In the last couple of years the Operating Margin of IBM has grown nicely.
  • With a Gross Margin value of 58.19%, IBM perfoms like the industry average, outperforming 45.95% 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 RankSector 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%
IBM.DE Yearly Profit, Operating, Gross MarginsIBM.DE Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40 50

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2

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.
  • The number of shares outstanding for IBM has been increased compared to 5 years ago.
  • The debt/assets ratio for IBM is higher compared to a year ago.
IBM.DE Yearly Shares OutstandingIBM.DE Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M
IBM.DE Yearly Total Debt VS Total AssetsIBM.DE Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50B 100B 150B

2.2 Solvency

  • IBM has an Altman-Z score of 3.47. This indicates that IBM is financially healthy and has little risk of bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 3.47, IBM is in the better half of the industry, outperforming 71.62% of the companies in the same industry.
  • 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.
  • Looking at the Debt to FCF ratio, with a value of 5.29, IBM is in line with its industry, outperforming 45.95% of the companies in the same industry.
  • A Debt/Equity ratio of 1.68 is on the high side and indicates that IBM has dependencies on debt financing.
  • With a Debt to Equity ratio value of 1.68, IBM is not doing good in the industry: 78.38% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.68
Debt/FCF 5.29
Altman-Z 3.47
ROIC/WACC0.78
WACC8.73%
IBM.DE Yearly LT Debt VS Equity VS FCFIBM.DE Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B 40B 50B

2.3 Liquidity

  • A Current Ratio of 0.96 indicates that IBM may have some problems paying 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 70.27% 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 68.92% of its industry peers.
Industry RankSector Rank
Current Ratio 0.96
Quick Ratio 0.92
IBM.DE Yearly Current Assets VS Current LiabilitesIBM.DE Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B 40B

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4

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.
  • Looking at the last year, IBM shows a small growth in Revenue. The Revenue has grown by 7.62% in the last year.
  • IBM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.12% yearly.
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 small growth in Earnings Per Share. The EPS will grow by 5.64% on average per year.
  • IBM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.79% yearly.
EPS Next Y6.47%
EPS Next 2Y6.33%
EPS Next 3Y4.68%
EPS Next 5Y5.64%
Revenue Next Year4.62%
Revenue Next 2Y4.4%
Revenue Next 3Y4.74%
Revenue Next 5Y4.79%

3.3 Evolution

  • The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
IBM.DE Yearly Revenue VS EstimatesIBM.DE Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 20B 40B 60B 80B 100B
IBM.DE Yearly EPS VS EstimatesIBM.DE Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 5 10 15 20

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2

4. Valuation

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 25.67, which means the current valuation is very expensive for IBM.
  • IBM's Price/Earnings is on the same level as the industry average.
  • Compared to an average S&P500 Price/Earnings ratio of 27.92, IBM is valued at the same level.
  • With a Price/Forward Earnings ratio of 24.12, IBM is valued on the expensive side.
  • The rest of the industry has a similar Price/Forward Earnings ratio as IBM.
  • IBM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.78.
Industry RankSector Rank
PE 25.67
Fwd PE 24.12
IBM.DE Price Earnings VS Forward Price EarningsIBM.DE Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

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 72.97% of the companies in the same industry.
  • IBM's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 23.99
EV/EBITDA 19.8
IBM.DE Per share dataIBM.DE EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 -20 40 -40 60

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.
  • The decent profitability rating of IBM may justify a higher PE ratio.
PEG (NY)3.96
PEG (5Y)4.32
EPS Next 2Y6.33%
EPS Next 3Y4.68%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

4

5. Dividend

5.1 Amount

  • IBM has a Yearly Dividend Yield of 2.17%. Purely for dividend investing, there may be better candidates out there.
  • IBM's Dividend Yield is comparable with the industry average which is at 2.36.
  • Compared to an average S&P500 Dividend Yield of 1.83, IBM has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.17%

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
IBM.DE Yearly Dividends per shareIBM.DE Yearly Dividends per shareYearly Dividends per share 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

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 2Y6.33%
EPS Next 3Y4.68%
IBM.DE Yearly Income VS Free CF VS DividendIBM.DE Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B
IBM.DE Dividend Payout.IBM.DE Dividend Payout, showing the Payout Ratio.IBM.DE Dividend Payout.PayoutRetained Earnings

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INTL BUSINESS MACHINES CORP

FRA:IBM (2/6/2026, 7:00:00 PM)

251.8

+5.65 (+2.3%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)01-28
Earnings (Next)04-21
Inst Owners64.18%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap235.37B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts71.85
Price Target250.33 (-0.58%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 2.17%
Yearly Dividend5.64
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)-0.53%
PT rev (3m)3.98%
EPS NQ rev (1m)-0.93%
EPS NQ rev (3m)3.62%
EPS NY rev (1m)0.02%
EPS NY rev (3m)2.43%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)0.62%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.62%
Valuation
Industry RankSector Rank
PE 25.67
Fwd PE 24.12
P/S 4.11
P/FCF 23.99
P/OCF 21.05
P/B 8.51
P/tB N/A
EV/EBITDA 19.8
EPS(TTM)9.81
EY3.9%
EPS(NY)10.44
Fwd EY4.15%
FCF(TTM)10.5
FCFY4.17%
OCF(TTM)11.96
OCFY4.75%
SpS61.24
BVpS29.6
TBVpS-42.13
PEG (NY)3.96
PEG (5Y)4.32
Graham Number80.83
Profitability
Industry RankSector 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 RankSector 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 3.47
F-Score6
WACC8.73%
ROIC/WACC0.78
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 Y6.47%
EPS Next 2Y6.33%
EPS Next 3Y4.68%
EPS Next 5Y5.64%
Revenue 1Y (TTM)7.62%
Revenue growth 3Y3.72%
Revenue growth 5Y4.12%
Sales Q2Q%12.15%
Revenue Next Year4.62%
Revenue Next 2Y4.4%
Revenue Next 3Y4.74%
Revenue Next 5Y4.79%
EBIT growth 1Y20.21%
EBIT growth 3Y14.66%
EBIT growth 5Y13.42%
EBIT Next Year45.85%
EBIT Next 3Y16.75%
EBIT Next 5Y13.5%
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 25.67 and the Price/Book (PB) ratio is 8.51.


Can you provide the financial health for IBM stock?

The financial health rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 2 / 10.