INTL BUSINESS MACHINES CORP (IBM) Fundamental Analysis & Valuation

NYSE:IBM • US4592001014

Current stock price

236.34 USD
-5.33 (-2.21%)
At close:
235 USD
-1.34 (-0.57%)
After Hours:

This IBM fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. IBM Profitability Analysis

1.1 Basic Checks

  • In the past year IBM was profitable.
  • 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.
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

  • With a decent Return On Assets value of 6.97%, IBM is doing good in the industry, outperforming 72.73% of the companies in the same industry.
  • IBM has a better Return On Equity (32.45%) than 90.91% of its industry peers.
  • IBM has a better Return On Invested Capital (7.68%) than 69.32% of its industry peers.
  • IBM had an Average Return On Invested Capital over the past 3 years of 7.08%. This is below the industry average of 11.08%.
  • 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's Profit Margin of 15.69% is amongst the best of the industry. IBM outperforms 93.18% of its industry peers.
  • In the last couple of years the Profit Margin of IBM has grown nicely.
  • IBM's Operating Margin of 16.30% is amongst the best of the industry. IBM outperforms 87.50% of its industry peers.
  • IBM's Operating Margin has improved in the last couple of years.
  • IBM has a better Gross Margin (58.19%) than 79.55% 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. IBM Health Analysis

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 3.22. This indicates that IBM is financially healthy and has little risk of bankruptcy at the moment.
  • IBM's Altman-Z score of 3.22 is fine compared to the rest of the industry. IBM outperforms 63.64% of its industry peers.
  • The Debt to FCF ratio of IBM is 5.29, which is a neutral value as it means it would take IBM, 5.29 years of fcf income to pay off all of its debts.
  • IBM has a Debt to FCF ratio of 5.29. This is comparable to the rest of the industry: IBM outperforms 55.68% of 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 72.73% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.68
Debt/FCF 5.29
Altman-Z 3.22
ROIC/WACC0.83
WACC9.25%
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.
  • IBM's Current ratio of 0.96 is on the low side compared to the rest of the industry. IBM is outperformed by 80.68% of its industry peers.
  • A Quick Ratio of 0.92 indicates that IBM may have some problems paying its short term obligations.
  • IBM's Quick ratio of 0.92 is on the low side compared to the rest of the industry. IBM is outperformed by 80.68% 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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5

3. IBM Growth Analysis

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.
  • The Revenue has been growing slightly by 4.12% on average over the past years.
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 Y8.16%
EPS Next 2Y8.29%
EPS Next 3Y8.96%
EPS Next 5Y11.08%
Revenue Next Year6.17%
Revenue Next 2Y5.38%
Revenue Next 3Y5.35%
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.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
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. IBM Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 20.43, which indicates a rather expensive current valuation of IBM.
  • IBM's Price/Earnings is on the same level as the industry average.
  • The average S&P500 Price/Earnings ratio is at 24.88. IBM is around the same levels.
  • A Price/Forward Earnings ratio of 18.89 indicates a rather expensive 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.
  • When comparing the Price/Forward Earnings ratio of IBM to the average of the S&P500 Index (22.19), we can say IBM is valued inline with the index average.
Industry RankSector Rank
PE 20.43
Fwd PE 18.89
IBM Price Earnings VS Forward Price EarningsIBM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • IBM's Enterprise Value to EBITDA ratio is in line with the industry average.
  • The rest of the industry has a similar Price/Free Cash Flow ratio as IBM.
Industry RankSector Rank
P/FCF 19.15
EV/EBITDA 16.7
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 IBM does not grow enough to justify the current Price/Earnings ratio.
  • IBM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.5
PEG (5Y)3.44
EPS Next 2Y8.29%
EPS Next 3Y8.96%

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6

5. IBM Dividend Analysis

5.1 Amount

  • IBM has a Yearly Dividend Yield of 2.78%. Purely for dividend investing, there may be better candidates out there.
  • In the last 3 months the price of IBM has falen by -22.53%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
  • IBM's Dividend Yield is rather good when compared to the industry average which is at 0.97. IBM pays more dividend than 90.91% of the companies in the same industry.
  • IBM's Dividend Yield is a higher than the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 2.78%

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.
  • IBM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP59.05%
EPS Next 2Y8.29%
EPS Next 3Y8.96%
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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IBM Fundamentals: All Metrics, Ratios and Statistics

INTL BUSINESS MACHINES CORP

NYSE:IBM (3/27/2026, 8:24:42 PM)

After market: 235 -1.34 (-0.57%)

236.34

-5.33 (-2.21%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)01-28
Earnings (Next)04-22
Inst Owners65.54%
Inst Owner Change2.66%
Ins Owners0.1%
Ins Owner Change6.86%
Market Cap221.69B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts74.07
Price Target311.1 (31.63%)
Short Float %2.29%
Short Ratio3.56
Dividend
Industry RankSector Rank
Dividend Yield 2.78%
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)-2.88%
PT rev (3m)6.22%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.75%
EPS NY rev (1m)-0.37%
EPS NY rev (3m)1.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.49%
Valuation
Industry RankSector Rank
PE 20.43
Fwd PE 18.89
P/S 3.28
P/FCF 19.15
P/OCF 16.8
P/B 6.79
P/tB N/A
EV/EBITDA 16.7
EPS(TTM)11.57
EY4.9%
EPS(NY)12.51
Fwd EY5.29%
FCF(TTM)12.34
FCFY5.22%
OCF(TTM)14.06
OCFY5.95%
SpS72
BVpS34.8
TBVpS-49.53
PEG (NY)2.5
PEG (5Y)3.44
Graham Number95.19
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 3.22
F-Score6
WACC9.25%
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 Y8.16%
EPS Next 2Y8.29%
EPS Next 3Y8.96%
EPS Next 5Y11.08%
Revenue 1Y (TTM)7.62%
Revenue growth 3Y3.72%
Revenue growth 5Y4.12%
Sales Q2Q%12.15%
Revenue Next Year6.17%
Revenue Next 2Y5.38%
Revenue Next 3Y5.35%
Revenue Next 5Y5.87%
EBIT growth 1Y20.21%
EBIT growth 3Y14.66%
EBIT growth 5Y13.42%
EBIT Next Year50.69%
EBIT Next 3Y18.76%
EBIT Next 5Y16.19%
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 Fundamental Analysis 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 20.43 and the Price/Book (PB) ratio is 6.79.


Can you provide the financial health for IBM stock?

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