INTL BUSINESS MACHINES CORP (IBM.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:IBM - US4592001014 - Common Stock
256.3 EUR
-2.3 (-0.89%)
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 scores excellent on profitability, but there are concerns on its financial health. IBM is quite expensive at the moment. It does show a decent growth rate.
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 Return On Assets of 5.40%. This is in the better half of the industry: IBM outperforms 64.47% of its industry peers.
IBM has a Return On Equity of 28.34%. This is amongst the best in the industry. IBM outperforms 90.79% of its industry peers.
IBM has a Return On Invested Capital (8.07%) which 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 26.78%.
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 93.42% of its industry peers.
IBM's Profit Margin has declined in the last couple of years.
The Operating Margin of IBM (16.06%) is better than 92.11% of its industry peers.
IBM's Operating Margin has been stable in the last couple of years.
IBM has a Gross Margin of 57.81%. This is comparable to the rest of the industry: IBM outperforms 44.74% of its industry peers.
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.
IBM has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, IBM has more shares outstanding
Compared to 1 year ago, IBM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.54 indicates that IBM is not in any danger for bankruptcy at the moment.
IBM has a better Altman-Z score (3.54) than 73.68% 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.
The Debt to FCF ratio of IBM (5.27) is comparable to the rest of the industry.
IBM has a Debt/Equity ratio of 1.98. This is a high value indicating a heavy dependency on external financing.
IBM's Debt to Equity ratio of 1.98 is on the low side compared to the rest of the industry. IBM is outperformed by 77.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 5.27 | ||
| Altman-Z | 3.54 |
ROIC/WACC0.92
WACC8.77%
2.3 Liquidity
A Current Ratio of 0.93 indicates that IBM may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.93, IBM is doing worse than 72.37% of the companies in the same industry.
A Quick Ratio of 0.89 indicates that IBM may have some problems paying its short term obligations.
IBM has a Quick ratio of 0.89. This is in the lower half of the industry: IBM underperforms 71.05% 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.
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 27.44, the valuation of IBM can be described as expensive.
IBM's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.61, IBM is valued at the same level.
A Price/Forward Earnings ratio of 24.44 indicates a rather expensive valuation of IBM.
Based on the Price/Forward Earnings ratio, IBM is valued a bit more expensive than 60.53% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.01, IBM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.44 | ||
| Fwd PE | 24.44 |
4.2 Price Multiples
73.68% of the companies in the same industry are cheaper than IBM, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, IBM is valued a bit more expensive than the industry average as 60.53% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.5 | ||
| EV/EBITDA | 21.27 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
IBM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.47
PEG (5Y)N/A
EPS Next 2Y9.19%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
IBM has a Yearly Dividend Yield of 2.24%. Purely for dividend investing, there may be better candidates out there.
IBM's Dividend Yield is comparable with the industry average which is at 2.27.
Compared to an average S&P500 Dividend Yield of 1.87, IBM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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.
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 (12/22/2025, 7:00:00 PM)
256.3
-2.3 (-0.89%)
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 Cap239.57B
Revenue(TTM)65.40B
Net Income(TTM)7.91B
Analysts71.85
Price Target251.66 (-1.81%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
Yearly Dividend5.7
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)2.76%
PT rev (3m)6.03%
EPS NQ rev (1m)0%
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 | 27.44 | ||
| Fwd PE | 24.44 | ||
| P/S | 4.3 | ||
| P/FCF | 23.5 | ||
| P/OCF | 20.87 | ||
| P/B | 10.08 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.27 |
EPS(TTM)9.34
EY3.64%
EPS(NY)10.49
Fwd EY4.09%
FCF(TTM)10.9
FCFY4.25%
OCF(TTM)12.28
OCFY4.79%
SpS59.57
BVpS25.42
TBVpS-46.65
PEG (NY)2.47
PEG (5Y)N/A
Graham Number73.09
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 | 3.54 |
F-Score6
WACC8.77%
ROIC/WACC0.92
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 1 / 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%.