INTL BUSINESS MACHINES CORP (IBM) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:IBM • US4592001014

293.77 USD
-5.16 (-1.73%)
Last: Feb 9, 2026, 12:46 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

5

Overall IBM gets a fundamental rating of 5 out of 10. We evaluated IBM against 87 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 valied quite expensively at the moment, while 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.
  • In the past 5 years IBM has always been profitable.
  • In the past 5 years IBM always reported a positive cash flow from operatings.
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 Return On Assets of 6.97%. This is in the better half of the industry: IBM outperforms 74.71% of its industry peers.
  • IBM's Return On Equity of 32.45% is amongst the best of the industry. IBM outperforms 90.80% of its industry peers.
  • The Return On Invested Capital of IBM (7.68%) is better than 70.11% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for IBM is significantly below the industry average of 29.07%.
  • The last Return On Invested Capital (7.68%) for IBM is above the 3 year average (7.08%), which is a sign of increasing profitability.
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's Profit Margin of 15.69% is amongst the best of the industry. IBM outperforms 90.80% of its industry peers.
  • In the last couple of years the Profit Margin of IBM has grown nicely.
  • With an excellent Operating Margin value of 16.30%, IBM belongs to the best of the industry, outperforming 87.36% of the companies in the same industry.
  • In the last couple of years the Operating Margin of IBM has grown nicely.
  • IBM has a better Gross Margin (58.19%) than 79.31% 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 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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2

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.
  • IBM has more shares outstanding than it did 5 years ago.
  • 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 3.51. This indicates that IBM is financially healthy and has little risk of bankruptcy at the moment.
  • IBM has a Altman-Z score of 3.51. This is in the better half of the industry: IBM outperforms 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.
  • IBM has a Debt to FCF ratio (5.29) which is in line with its industry peers.
  • IBM has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
  • IBM has a worse Debt to Equity ratio (1.68) than 73.56% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.68
Debt/FCF 5.29
Altman-Z 3.51
ROIC/WACC0.85
WACC9.01%
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

  • IBM has a Current 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's Current ratio of 0.96 is on the low side compared to the rest of the industry. IBM is outperformed by 80.46% 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.
  • Looking at the Quick ratio, with a value of 0.92, IBM is doing worse than 81.61% of the companies in the same industry.
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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4

3. Growth

3.1 Past

  • The Earnings Per Share has grown by an nice 12.00% over the past year.
  • 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.
  • IBM shows a small growth in Revenue. In the last year, the Revenue has grown by 7.62%.
  • 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 Y8.56%
EPS Next 2Y8.43%
EPS Next 3Y9.11%
EPS Next 5Y5.64%
Revenue Next Year6.14%
Revenue Next 2Y5.37%
Revenue Next 3Y5.33%
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.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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

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3

4. Valuation

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 25.39, IBM can be considered very expensive at the moment.
  • IBM's Price/Earnings is on the same level as the industry average.
  • Compared to an average S&P500 Price/Earnings ratio of 27.93, IBM is valued at the same level.
  • The Price/Forward Earnings ratio is 23.39, which indicates a rather expensive current valuation of IBM.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of IBM is on the same level as its industry peers.
  • The average S&P500 Price/Forward Earnings ratio is at 27.77. IBM is around the same levels.
Industry RankSector Rank
PE 25.39
Fwd PE 23.39
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

  • IBM's Enterprise Value to EBITDA ratio is in line with the industry average.
  • IBM's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 23.72
EV/EBITDA 20.3
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)2.96
PEG (5Y)4.27
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 2.32%.
  • Compared to an average industry Dividend Yield of 0.49, IBM pays a better dividend. On top of this IBM pays more dividend than 91.95% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.81, IBM pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.32%

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.
  • The dividend of IBM decreased 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 (2/9/2026, 12:46:09 PM)

293.77

-5.16 (-1.73%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)01-28
Earnings (Next)04-21
Inst Owners64.18%
Inst Owner Change-1.38%
Ins Owners0.09%
Ins Owner Change5.2%
Market Cap274.60B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts71.85
Price Target319.58 (8.79%)
Short Float %2.13%
Short Ratio4.87
Dividend
Industry RankSector Rank
Dividend Yield 2.32%
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)-3.75%
EPS NQ rev (3m)-3.92%
EPS NY rev (1m)1.98%
EPS NY rev (3m)2.32%
Revenue NQ rev (1m)0.35%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)1.46%
Revenue NY rev (3m)1.55%
Valuation
Industry RankSector Rank
PE 25.39
Fwd PE 23.39
P/S 4.07
P/FCF 23.72
P/OCF 20.81
P/B 8.41
P/tB N/A
EV/EBITDA 20.3
EPS(TTM)11.57
EY3.94%
EPS(NY)12.56
Fwd EY4.28%
FCF(TTM)12.38
FCFY4.22%
OCF(TTM)14.11
OCFY4.8%
SpS72.25
BVpS34.93
TBVpS-49.7
PEG (NY)2.96
PEG (5Y)4.27
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 3.51
F-Score6
WACC9.01%
ROIC/WACC0.85
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 5Y5.64%
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 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 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 25.39 and the Price/Book (PB) ratio is 8.41.


Can you provide the financial health for IBM stock?

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