INTL BUSINESS MACHINES CORP (IBM) Fundamental Analysis & Valuation

NYSE:IBM • US4592001014

Current stock price

231.98 USD
+0.9 (+0.39%)
At close:
231.2 USD
-0.78 (-0.34%)
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.
  • IBM had a positive operating cash flow in the past year.
  • IBM had positive earnings in each of the past 5 years.
  • Each year in the past 5 years IBM had a positive operating cash flow.
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

  • The Return On Assets of IBM (6.88%) is better than 68.54% of its industry peers.
  • IBM has a better Return On Equity (32.61%) than 89.89% of its industry peers.
  • IBM has a better Return On Invested Capital (7.59%) than 68.54% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for IBM is below the industry average of 10.44%.
  • The 3 year average ROIC (7.19%) for IBM is below the current ROIC(7.59%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 6.88%
ROE 32.61%
ROIC 7.59%
ROA(3y)5.64%
ROA(5y)4.51%
ROE(3y)29.27%
ROE(5y)25.13%
ROIC(3y)7.19%
ROIC(5y)6.47%
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 (15.60%) than 89.89% of its industry peers.
  • IBM's Profit Margin has improved in the last couple of years.
  • IBM has a better Operating Margin (16.19%) than 86.52% of its industry peers.
  • IBM's Operating Margin has improved in the last couple of years.
  • The Gross Margin of IBM (58.36%) is better than 79.78% 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 16.19%
PM (TTM) 15.6%
GM 58.36%
OM growth 3Y12.07%
OM growth 5Y9.83%
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

More info and screens

ROAROEROICOperating and Profit MarginShow most profitable peers

2

2. IBM Health Analysis

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.
  • The number of shares outstanding for IBM has been increased compared to 5 years ago.
  • Compared to 1 year ago, IBM has a worse debt to assets ratio.
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

  • An Altman-Z score of 3.07 indicates that IBM is not in any danger for bankruptcy at the moment.
  • IBM has a Altman-Z score of 3.07. This is comparable to the rest of the industry: IBM outperforms 58.43% of its industry peers.
  • The Debt to FCF ratio of IBM is 5.41, which is a neutral value as it means it would take IBM, 5.41 years of fcf income to pay off all of its debts.
  • The Debt to FCF ratio of IBM (5.41) is comparable to the rest of the industry.
  • IBM has a Debt/Equity ratio of 1.75. This is a high value indicating a heavy dependency on external financing.
  • IBM has a worse Debt to Equity ratio (1.75) than 74.16% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.75
Debt/FCF 5.41
Altman-Z 3.07
ROIC/WACC0.77
WACC9.86%
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 0.80. 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 Current ratio of 0.80. This is amonst the worse of the industry: IBM underperforms 83.15% of its industry peers.
  • A Quick Ratio of 0.76 indicates that IBM may have some problems paying its short term obligations.
  • IBM has a worse Quick ratio (0.76) than 83.15% of its industry peers.
Industry RankSector Rank
Current Ratio 0.8
Quick Ratio 0.76
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

More info and screens

WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

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 15.90%, which is quite good.
  • The Earnings Per Share has been growing slightly by 5.94% on average over the past years.
  • The Revenue has grown by 9.67% in the past year. This is quite good.
  • IBM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.12% yearly.
EPS 1Y (TTM)15.9%
EPS 3Y8.25%
EPS 5Y5.94%
EPS Q2Q%19.37%
Revenue 1Y (TTM)9.67%
Revenue growth 3Y3.72%
Revenue growth 5Y4.12%
Sales Q2Q%9.46%

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 6.29% on average per year.
  • Based on estimates for the next years, IBM will show a small growth in Revenue. The Revenue will grow by 5.36% on average per year.
EPS Next Y8.16%
EPS Next 2Y8.19%
EPS Next 3Y8.77%
EPS Next 5Y6.29%
Revenue Next Year6.12%
Revenue Next 2Y5.36%
Revenue Next 3Y5.51%
Revenue Next 5Y5.36%

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 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

More info and screens

Find the best growth stocksShow best growing peers

4

4. IBM Valuation Analysis

4.1 Price/Earnings Ratio

  • IBM is valuated rather expensively with a Price/Earnings ratio of 19.53.
  • The rest of the industry has a similar Price/Earnings ratio as IBM.
  • IBM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.42.
  • IBM is valuated rather expensively with a Price/Forward Earnings ratio of 17.13.
  • The rest of the industry has a similar Price/Forward Earnings ratio as IBM.
  • IBM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.24, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 19.53
Fwd PE 17.13
IBM Price Earnings VS Forward Price EarningsIBM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • IBM's Enterprise Value to EBITDA is on the same level as the industry average.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of IBM indicates a somewhat cheap valuation: IBM is cheaper than 60.67% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 17.75
EV/EBITDA 16.66
IBM Per share dataIBM EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 -20 40 -40 60 -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.
  • IBM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.39
PEG (5Y)3.29
EPS Next 2Y8.19%
EPS Next 3Y8.77%

More info and screens

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

7

5. IBM Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.93%, IBM has a reasonable but not impressive dividend return.
  • In the last 3 months the price of IBM has falen by -20.67%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
  • Compared to an average industry Dividend Yield of 1.12, IBM pays a better dividend. On top of this IBM pays more dividend than 91.01% of the companies listed in the same industry.
  • IBM's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
Industry RankSector Rank
Dividend Yield 2.93%

5.2 History

  • The dividend of IBM has a limited annual growth rate of 0.61%.
  • IBM has paid a dividend for at least 10 years, which is a reliable track record.
  • IBM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.61%
Div Incr Years3
Div Non Decr Years3
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

  • IBM pays out 58.42% of its income as dividend. 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.
DP58.42%
EPS Next 2Y8.19%
EPS Next 3Y8.77%
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

More info and screens

Find the best dividend stocksShow peers with best dividend

IBM Fundamentals: All Metrics, Ratios and Statistics

INTL BUSINESS MACHINES CORP

NYSE:IBM (4/24/2026, 8:04:00 PM)

After market: 231.2 -0.78 (-0.34%)

231.98

+0.9 (+0.39%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)04-22
Earnings (Next)07-22
Inst Owners65.22%
Inst Owner Change0.11%
Ins Owners0.1%
Ins Owner Change6.92%
Market Cap217.60B
Revenue(TTM)68.91B
Net Income(TTM)10.75B
Analysts74.07
Price Target308.55 (33.01%)
Short Float %2.49%
Short Ratio3.79
Dividend
Industry RankSector Rank
Dividend Yield 2.93%
Yearly Dividend6.71
Dividend Growth(5Y)0.61%
DP58.42%
Div Incr Years3
Div Non Decr Years3
Ex-Date02-10
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.24%
Min EPS beat(2)3.6%
Max EPS beat(2)4.88%
EPS beat(4)4
Avg EPS beat(4)5.16%
Min EPS beat(4)3.6%
Max EPS beat(4)7.28%
EPS beat(8)8
Avg EPS beat(8)6.13%
EPS beat(12)12
Avg EPS beat(12)5.37%
EPS beat(16)15
Avg EPS beat(16)4.51%
Revenue beat(2)2
Avg Revenue beat(2)1.17%
Min Revenue beat(2)0.96%
Max Revenue beat(2)1.37%
Revenue beat(4)4
Avg Revenue beat(4)1.04%
Min Revenue beat(4)0.5%
Max Revenue beat(4)1.37%
Revenue beat(8)5
Avg Revenue beat(8)0.2%
Revenue beat(12)5
Avg Revenue beat(12)-0.25%
Revenue beat(16)8
Avg Revenue beat(16)0.06%
PT rev (1m)-3.68%
PT rev (3m)3.01%
EPS NQ rev (1m)-0.46%
EPS NQ rev (3m)-0.05%
EPS NY rev (1m)0%
EPS NY rev (3m)1.58%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)1.43%
Valuation
Industry RankSector Rank
PE 19.53
Fwd PE 17.13
P/S 3.16
P/FCF 17.75
P/OCF 15.55
P/B 6.6
P/tB N/A
EV/EBITDA 16.66
EPS(TTM)11.88
EY5.12%
EPS(NY)13.54
Fwd EY5.84%
FCF(TTM)13.07
FCFY5.63%
OCF(TTM)14.92
OCFY6.43%
SpS73.46
BVpS35.15
TBVpS-60.08
PEG (NY)2.39
PEG (5Y)3.29
Graham Number96.9356 (-58.21%)
Profitability
Industry RankSector Rank
ROA 6.88%
ROE 32.61%
ROCE 9.61%
ROIC 7.59%
ROICexc 8.45%
ROICexgc 58.72%
OM 16.19%
PM (TTM) 15.6%
GM 58.36%
FCFM 17.79%
ROA(3y)5.64%
ROA(5y)4.51%
ROE(3y)29.27%
ROE(5y)25.13%
ROIC(3y)7.19%
ROIC(5y)6.47%
ROICexc(3y)8.29%
ROICexc(5y)7.33%
ROICexgc(3y)42.21%
ROICexgc(5y)35.2%
ROCE(3y)9.1%
ROCE(5y)8.19%
ROICexgc growth 3Y16.58%
ROICexgc growth 5Y28.25%
ROICexc growth 3Y11.41%
ROICexc growth 5Y15.19%
OM growth 3Y12.07%
OM growth 5Y9.83%
PM growth 3Y79.59%
PM growth 5Y9.14%
GM growth 3Y2.52%
GM growth 5Y0.79%
F-Score8
Asset Turnover0.44
Health
Industry RankSector Rank
Debt/Equity 1.75
Debt/FCF 5.41
Debt/EBITDA 3.55
Cap/Depr 33.88%
Cap/Sales 2.52%
Interest Coverage 250
Cash Conversion 85.97%
Profit Quality 114.01%
Current Ratio 0.8
Quick Ratio 0.76
Altman-Z 3.07
F-Score8
WACC9.86%
ROIC/WACC0.77
Cap/Depr(3y)37.3%
Cap/Depr(5y)39.22%
Cap/Sales(3y)2.73%
Cap/Sales(5y)3.25%
Profit Quality(3y)154.99%
Profit Quality(5y)231.2%
High Growth Momentum
Growth
EPS 1Y (TTM)15.9%
EPS 3Y8.25%
EPS 5Y5.94%
EPS Q2Q%19.37%
EPS Next Y8.16%
EPS Next 2Y8.19%
EPS Next 3Y8.77%
EPS Next 5Y6.29%
Revenue 1Y (TTM)9.67%
Revenue growth 3Y3.72%
Revenue growth 5Y4.12%
Sales Q2Q%9.46%
Revenue Next Year6.12%
Revenue Next 2Y5.36%
Revenue Next 3Y5.51%
Revenue Next 5Y5.36%
EBIT growth 1Y20.13%
EBIT growth 3Y16.24%
EBIT growth 5Y14.36%
EBIT Next Year50.48%
EBIT Next 3Y18.78%
EBIT Next 5Y16.19%
FCF growth 1Y-2.78%
FCF growth 3Y10.61%
FCF growth 5Y-5.21%
OCF growth 1Y-2.31%
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 4 / 10 to INTL BUSINESS MACHINES CORP (IBM). This can be considered as Fairly Valued.


Can you provide the profitability details for INTL BUSINESS MACHINES CORP?

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


Can you provide the expected EPS growth for IBM stock?

The Earnings per Share (EPS) of INTL BUSINESS MACHINES CORP (IBM) is expected to grow by 8.16% in the next year.


How sustainable is the dividend of INTL BUSINESS MACHINES CORP (IBM) stock?

The dividend rating of INTL BUSINESS MACHINES CORP (IBM) is 7 / 10 and the dividend payout ratio is 58.42%.