INTL BUSINESS MACHINES CORP (IBM) Stock Fundamental Analysis

NYSE:IBM • US4592001014

258.865 USD
-3.51 (-1.34%)
Last: Feb 17, 2026, 02:56 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

5

IBM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 87 industry peers in the IT Services industry. While IBM has a great profitability rating, there are quite some concerns on its financial health. IBM is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

8

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.
  • 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.
IBM Yearly Net Income VS EBIT VS OCF VS FCFIBM 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

  • IBM has a better Return On Assets (6.97%) than 74.71% 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 90.80% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 7.68%, IBM is in the better half of the industry, outperforming 70.11% of the companies in the same industry.
  • IBM had an Average Return On Invested Capital over the past 3 years of 7.08%. This is below the industry average of 10.62%.
  • The 3 year average ROIC (7.08%) for IBM is below the current ROIC(7.68%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 6.97%
ROE 32.45%
ROIC 7.68%
ROA(3y)5.64%
ROA(5y)4.51%
ROE(3y)29.27%
ROE(5y)25.13%
ROIC(3y)7.08%
ROIC(5y)6.41%
IBM Yearly ROA, ROE, ROICIBM Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60

1.3 Margins

  • IBM has a better Profit Margin (15.69%) than 91.95% of its industry peers.
  • IBM's Profit Margin has improved in the last couple of years.
  • The Operating Margin of IBM (16.30%) is better than 87.36% of its industry peers.
  • In the last couple of years the Operating Margin of IBM has grown nicely.
  • Looking at the Gross Margin, with a value of 58.19%, IBM is in the better half of the industry, outperforming 79.31% of the companies in the same industry.
  • IBM's Gross Margin has been stable in the last couple of years.
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 Yearly Profit, Operating, Gross MarginsIBM 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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ROAROEROICOperating and Profit MarginShow most profitable peers

2

2. Health

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), IBM is destroying value.
  • Compared to 1 year ago, IBM has more shares outstanding
  • Compared to 5 years ago, IBM has more shares outstanding
  • The debt/assets ratio for IBM is higher compared to a year ago.
IBM Yearly Shares OutstandingIBM Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M
IBM Yearly Total Debt VS Total AssetsIBM 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 3.34. This indicates that IBM is financially healthy and has little risk of bankruptcy at the moment.
  • IBM has a better Altman-Z score (3.34) than 63.22% of its industry peers.
  • 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.
  • The Debt to FCF ratio of IBM (5.29) is comparable to the rest of the industry.
  • IBM has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
  • Looking at the Debt to Equity ratio, with a value of 1.68, IBM is doing worse than 73.56% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.68
Debt/FCF 5.29
Altman-Z 3.34
ROIC/WACC0.83
WACC9.22%
IBM Yearly LT Debt VS Equity VS FCFIBM 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.
  • Looking at the Current ratio, with a value of 0.96, IBM is doing worse than 82.76% of the companies in the same industry.
  • 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.
  • The Quick ratio of IBM (0.92) is worse than 82.76% of its industry peers.
Industry RankSector Rank
Current Ratio 0.96
Quick Ratio 0.92
IBM Yearly Current Assets VS Current LiabilitesIBM 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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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

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.
  • Measured over the past 5 years, IBM shows a small growth in Earnings Per Share. The EPS has been growing by 5.94% on average per year.
  • 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 quite strong growth in Earnings Per Share. The EPS will grow by 11.08% on average per year.
  • The Revenue is expected to grow by 5.87% on average over the next years.
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.
IBM Yearly Revenue VS EstimatesIBM Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 20B 40B 60B 80B 100B
IBM Yearly EPS VS EstimatesIBM Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 5 10 15 20 25

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3

4. Valuation

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 22.37 indicates a rather expensive valuation of IBM.
  • IBM's Price/Earnings ratio is in line with the industry average.
  • IBM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.19, which is the current average of the S&P500 Index.
  • With a Price/Forward Earnings ratio of 20.61, IBM is valued on the expensive side.
  • 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 28.06, IBM is valued a bit cheaper.
Industry RankSector Rank
PE 22.37
Fwd PE 20.61
IBM Price Earnings VS Forward Price EarningsIBM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of IBM is on the same level as its industry peers.
  • IBM's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 20.9
EV/EBITDA 18.17
IBM Per share dataIBM 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 an expensive valuation of the company.
  • The excellent profitability rating of IBM may justify a higher PE ratio.
PEG (NY)2.61
PEG (5Y)3.77
EPS Next 2Y8.43%
EPS Next 3Y9.11%

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

6

5. Dividend

5.1 Amount

  • IBM has a Yearly Dividend Yield of 2.59%.
  • IBM's Dividend Yield is rather good when compared to the industry average which is at 0.54. IBM pays more dividend than 91.95% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.82, IBM pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.59%

5.2 History

  • The dividend of IBM has a limited annual growth rate of 0.63%.
  • IBM has paid a dividend for at least 10 years, which is a reliable track record.
  • IBM has decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.63%
Div Incr Years2
Div Non Decr Years2
IBM Yearly Dividends per shareIBM Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6 8 10

5.3 Sustainability

  • 59.05% of the earnings are spent on dividend by IBM. 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%
IBM Yearly Income VS Free CF VS DividendIBM 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 Dividend Payout.IBM Dividend Payout, showing the Payout Ratio.IBM Dividend Payout.PayoutRetained Earnings

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INTL BUSINESS MACHINES CORP

NYSE:IBM (2/17/2026, 2:56:03 PM)

258.865

-3.51 (-1.34%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)01-28
Earnings (Next)04-22
Inst Owners64.18%
Inst Owner Change1.4%
Ins Owners0.09%
Ins Owner Change5.2%
Market Cap241.97B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts73.33
Price Target319.58 (23.45%)
Short Float %2%
Short Ratio3.99
Dividend
Industry RankSector Rank
Dividend Yield 2.59%
Yearly Dividend6.72
Dividend Growth(5Y)0.63%
DP59.05%
Div Incr Years2
Div Non Decr Years2
Ex-Date02-10
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)9.11%
PT rev (3m)11.66%
EPS NQ rev (1m)-2.85%
EPS NQ rev (3m)-3.92%
EPS NY rev (1m)1.98%
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 RankSector Rank
PE 22.37
Fwd PE 20.61
P/S 3.58
P/FCF 20.9
P/OCF 18.34
P/B 7.41
P/tB N/A
EV/EBITDA 18.17
EPS(TTM)11.57
EY4.47%
EPS(NY)12.56
Fwd EY4.85%
FCF(TTM)12.38
FCFY4.78%
OCF(TTM)14.11
OCFY5.45%
SpS72.25
BVpS34.93
TBVpS-49.7
PEG (NY)2.61
PEG (5Y)3.77
Graham Number95.35
Profitability
Industry RankSector Rank
ROA 6.97%
ROE 32.45%
ROCE 9.72%
ROIC 7.68%
ROICexc 8.8%
ROICexgc 44.15%
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)7.08%
ROIC(5y)6.41%
ROICexc(3y)8.17%
ROICexc(5y)7.26%
ROICexgc(3y)41.61%
ROICexgc(5y)34.84%
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 3.34
F-Score6
WACC9.22%
ROIC/WACC0.83
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 FAQ

What is the fundamental rating for IBM stock?

ChartMill assigns a fundamental rating of 5 / 10 to IBM.


What is the valuation status of INTL BUSINESS MACHINES CORP (IBM) stock?

ChartMill assigns a valuation rating of 3 / 10 to INTL BUSINESS MACHINES CORP (IBM). This can be considered as Overvalued.


How profitable is INTL BUSINESS MACHINES CORP (IBM) stock?

INTL BUSINESS MACHINES CORP (IBM) has a profitability rating of 8 / 10.


What are the PE and PB ratios of INTL BUSINESS MACHINES CORP (IBM) stock?

The Price/Earnings (PE) ratio for INTL BUSINESS MACHINES CORP (IBM) is 22.37 and the Price/Book (PB) ratio is 7.41.


Can you provide the financial health for IBM stock?

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