INTL BUSINESS MACHINES CORP (IBM) Stock Fundamental Analysis

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

291.98 USD
-2.68 (-0.91%)
Last: Feb 10, 2026, 01:52 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 belongs to the best of the industry regarding profitability, there are concerns on its financial health. While showing a medium growth rate, IBM is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

8

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.
  • In the past 5 years IBM has always been profitable.
  • 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

  • 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.
  • With an excellent Return On Equity value of 32.45%, IBM belongs to the best of the industry, outperforming 90.80% of the companies in the same industry.
  • IBM's Return On Invested Capital of 7.68% is fine compared to the rest of the industry. IBM outperforms 70.11% of its industry peers.
  • IBM had an Average Return On Invested Capital over the past 3 years of 7.08%. This 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 has a Profit Margin of 15.69%. This is amongst the best in the industry. IBM outperforms 90.80% 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 87.36% of its industry peers.
  • 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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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.
  • 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 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 3.50 indicates that IBM is not in any danger for bankruptcy at the moment.
  • IBM has a Altman-Z score of 3.50. This is in the better half of the industry: IBM outperforms 62.07% 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 (5.29) which is in line with its industry peers.
  • A Debt/Equity ratio of 1.68 is on the high side and indicates that IBM has dependencies on debt financing.
  • The Debt to Equity ratio of IBM (1.68) is worse than 73.56% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.68
Debt/FCF 5.29
Altman-Z 3.5
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

  • A Current Ratio of 0.96 indicates that IBM may have some problems paying its short term obligations.
  • IBM has a worse Current ratio (0.96) than 80.46% 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 81.61% 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

4

3. Growth

3.1 Past

  • The Earnings Per Share has grown by an nice 12.00% over the past year.
  • IBM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.94% yearly.
  • IBM shows a small growth in Revenue. In the last year, the Revenue has grown by 7.62%.
  • 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

  • The Earnings Per Share is expected to grow by 5.64% on average over the next years.
  • 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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Find the best growth stocksShow best growing peers

3

4. Valuation

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 25.24, the valuation of IBM can be described as expensive.
  • Compared to the rest of the industry, the Price/Earnings ratio of IBM is on the same level as its industry peers.
  • IBM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.06.
  • Based on the Price/Forward Earnings ratio of 23.25, the valuation of IBM can be described as rather expensive.
  • IBM's Price/Forward Earnings is on the same level as the industry average.
  • When comparing the Price/Forward Earnings ratio of IBM to the average of the S&P500 Index (27.86), we can say IBM is valued inline with the index average.
Industry RankSector Rank
PE 25.24
Fwd PE 23.25
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 ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 23.58
EV/EBITDA 20.15
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.
  • The excellent profitability rating of IBM may justify a higher PE ratio.
PEG (NY)2.95
PEG (5Y)4.25
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%. Purely for dividend investing, there may be better candidates out there.
  • IBM's Dividend Yield is rather good when compared to the industry average which is at 0.49. IBM pays more dividend than 91.95% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.80, 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 been paying a dividend for at least 10 years, so it has 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 (2/10/2026, 1:52:02 PM)

291.98

-2.68 (-0.91%)

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 Cap272.93B
Revenue(TTM)67.53B
Net Income(TTM)10.59B
Analysts71.85
Price Target319.58 (9.45%)
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 25.24
Fwd PE 23.25
P/S 4.04
P/FCF 23.58
P/OCF 20.69
P/B 8.36
P/tB N/A
EV/EBITDA 20.15
EPS(TTM)11.57
EY3.96%
EPS(NY)12.56
Fwd EY4.3%
FCF(TTM)12.38
FCFY4.24%
OCF(TTM)14.11
OCFY4.83%
SpS72.25
BVpS34.93
TBVpS-49.7
PEG (NY)2.95
PEG (5Y)4.25
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 3.5
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 25.24 and the Price/Book (PB) ratio is 8.36.


Can you provide the financial health for IBM stock?

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