INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:IBM - US4592001014 - Common Stock
261 EUR
-2.65 (-1.01%)
We assign a fundamental rating of 4 out of 10 to IBM. IBM was compared to 76 industry peers in the IT Services industry. IBM has an excellent profitability rating, but 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.
- In the past year IBM had a positive cash flow from operations.
- Each year in the past 5 years IBM has been profitable.
- IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.40%, IBM is in the better half of the industry, outperforming 61.84% of the companies in the same industry.
- IBM has a better Return On Equity (28.34%) than 88.16% of its industry peers.
- With a Return On Invested Capital value of 8.07%, IBM perfoms like the industry average, outperforming 47.37% of the companies in the same industry.
- IBM had an Average Return On Invested Capital over the past 3 years of 7.07%. This is significantly below the industry average of 25.87%.
- 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
- Looking at the Profit Margin, with a value of 12.09%, IBM belongs to the top of the industry, outperforming 90.79% of the companies in the same industry.
- In the last couple of years the Profit Margin of IBM has declined.
- IBM has a better Operating Margin (16.06%) than 90.79% of its industry peers.
- IBM's Operating Margin has been stable in the last couple of years.
- The Gross Margin of IBM (57.81%) is comparable to the rest of the 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so IBM is destroying value.
- Compared to 1 year ago, IBM has more shares outstanding
- Compared to 5 years ago, IBM has more shares outstanding
- IBM has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.57 indicates that IBM is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 3.57, IBM is in the better half of the industry, outperforming 71.05% of the companies in the same industry.
- 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.
- IBM has a Debt to FCF ratio (5.27) which is comparable to the rest of the 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 Debt to Equity ratio of 1.98. This is amonst the worse of the industry: IBM underperforms 80.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.57 |
ROIC/WACC0.94
WACC8.59%
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.
- IBM has a worse Current ratio (0.93) than 75.00% 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 75.00% 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
- The Earnings Per Share is expected to grow by 6.07% on average over the next years.
- IBM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.12% yearly.
EPS Next Y11.1%
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
- The Price/Earnings ratio is 27.74, which means the current valuation is very expensive for IBM.
- 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 27.33.
- IBM is valuated rather expensively with a Price/Forward Earnings ratio of 24.70.
- 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 24.12, IBM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.74 | ||
| Fwd PE | 24.7 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, IBM is valued a bit more expensive than the industry average as 76.32% of the companies are valued more cheaply.
- IBM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.75 | ||
| EV/EBITDA | 21.65 |
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)2.5
PEG (5Y)N/A
EPS Next 2Y9.19%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
- IBM has a Yearly Dividend Yield of 2.22%.
- IBM's Dividend Yield is a higher than the industry average which is at 2.26.
- Compared to an average S&P500 Dividend Yield of 1.91, IBM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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 2Y9.19%
EPS Next 3Y8.11%
FRA:IBM (1/14/2026, 5:23:00 PM)
261
-2.65 (-1.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)10-22 2025-10-22/amc
Earnings (Next)01-28 2026-01-28/amc
Inst Owners64.18%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap243.97B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts71.85
Price Target251.66 (-3.58%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend5.74
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)0.38%
PT rev (3m)4.54%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.41%
EPS NY rev (1m)0%
EPS NY rev (3m)2.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.74 | ||
| Fwd PE | 24.7 | ||
| P/S | 4.35 | ||
| P/FCF | 23.75 | ||
| P/OCF | 21.09 | ||
| P/B | 10.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.65 |
EPS(TTM)9.41
EY3.61%
EPS(NY)10.57
Fwd EY4.05%
FCF(TTM)10.99
FCFY4.21%
OCF(TTM)12.38
OCFY4.74%
SpS60.04
BVpS25.62
TBVpS-47.02
PEG (NY)2.5
PEG (5Y)N/A
Graham Number73.65
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 | 3.57 |
F-Score6
WACC8.59%
ROIC/WACC0.94
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 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 27.74 and the Price/Book (PB) ratio is 10.19.
Can you provide the financial health for IBM stock?
The financial health rating of INTL BUSINESS MACHINES CORP (IBM.DE) is 3 / 10.