INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
Europe - FRA:IBM - US4592001014 - Common Stock
256.35 EUR
-3.15 (-1.21%)
IBM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 72 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. While showing a medium growth rate, IBM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
IBM had positive earnings in the past year.
IBM had a positive operating cash flow in the past year.
IBM had positive earnings in each of the past 5 years.
IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
IBM has a better Return On Assets (5.40%) than 66.67% of its industry peers.
IBM has a Return On Equity of 28.34%. This is amongst the best in the industry. IBM outperforms 91.67% of its industry peers.
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 below the industry average of 11.33%.
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
IBM's Profit Margin of 12.09% is amongst the best of the industry. IBM outperforms 93.06% of its industry peers.
In the last couple of years the Profit Margin of IBM has declined.
IBM has a better Operating Margin (16.06%) than 93.06% of its industry peers.
In the last couple of years the Operating Margin of IBM has remained more or less at the same level.
Looking at the Gross Margin, with a value of 57.81%, IBM is in line with its industry, outperforming 50.00% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
IBM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.53 indicates that IBM is not in any danger for bankruptcy at the moment.
IBM has a Altman-Z score of 3.53. This is in the better half of the industry: IBM outperforms 79.17% of its industry peers.
IBM has a debt to FCF ratio of 5.27. This is a neutral value as IBM would need 5.27 years to pay back of 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 45.83% 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 79.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.53 |
ROIC/WACC0.97
WACC8.31%
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.
The Current ratio of IBM (0.93) is worse than 70.83% of its industry peers.
A Quick Ratio of 0.89 indicates that IBM may have some problems paying its short term obligations.
The Quick ratio of IBM (0.89) is worse than 73.61% 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%.
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
Based on estimates for the next years, IBM will show a small growth in Earnings Per Share. The EPS will grow by 6.07% on average per year.
IBM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.12% yearly.
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.
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
IBM is valuated quite expensively with a Price/Earnings ratio of 27.10.
IBM's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of IBM to the average of the S&P500 Index (25.56), we can say IBM is valued inline with the index average.
The Price/Forward Earnings ratio is 24.21, which indicates a rather expensive current valuation of IBM.
61.11% of the companies in the same industry are cheaper than IBM, based on the Price/Forward Earnings ratio.
IBM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.62.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.1 | ||
| Fwd PE | 24.21 |
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 72.22% of the companies in the same industry.
62.50% of the companies in the same industry are cheaper than IBM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.12 | ||
| EV/EBITDA | 21.19 |
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)2.43
PEG (5Y)N/A
EPS Next 2Y9.01%
EPS Next 3Y7.8%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.20%, IBM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.84, IBM has a dividend in line with its industry peers.
IBM's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
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 (11/18/2025, 12:34:03 PM)
256.35
-3.15 (-1.21%)
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 Cap238.80B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts70.37
Price Target244.88 (-4.47%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
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)1.72%
PT rev (3m)2.28%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)-0.04%
EPS NY rev (1m)2.1%
EPS NY rev (3m)4.28%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)0.11%
Revenue NY rev (1m)0.42%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.1 | ||
| Fwd PE | 24.21 | ||
| P/S | 4.23 | ||
| P/FCF | 23.12 | ||
| P/OCF | 20.53 | ||
| P/B | 9.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.19 |
EPS(TTM)9.46
EY3.69%
EPS(NY)10.59
Fwd EY4.13%
FCF(TTM)11.09
FCFY4.32%
OCF(TTM)12.49
OCFY4.87%
SpS60.56
BVpS25.84
TBVpS-47.43
PEG (NY)2.43
PEG (5Y)N/A
Graham Number74.16
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 | 3.53 |
F-Score6
WACC8.31%
ROIC/WACC0.97
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%.