International Business Machines Corp
Exchange: NYSESector: TechnologyIndustry: Information Technology Services
International Business Machines Corporation (IBM) is an information technology (IT) company. IBM operates in five segments: Global Technology Services (GTS), Global Business Services (GBS), Software, Systems and Technology and Global Financing. GTS primarily provides IT infrastructure services and business process services. GBS provides professional services and application management services. Software consists primarily of middleware and operating systems software. Systems and Technology provides clients with business solutions requiring advanced computing power and storage capabilities. In October 2013, International Business Machines Corporation acquired Xtify Inc. In October 2013, the Company announced that it has completed the acquisition of The Now Factory, a privately held provider of analytics software that helps communications service providers (CSPs) deliver better customer experiences and drive new revenue opportunities.
Did you know?
Trading 35% above its estimated fair value of $161.31.
Current Price
$248.16
+2.06%GoodMoat Value
$161.31
35.0% overvaluedProfile
Valuation (TTM)
Market Cap$231.96B
P/E21.90
EV$275.02B
P/B7.10
Shares Out934.74M
P/Sales3.43
Revenue$67.53B
EV/EBITDA15.88
International Business Machines Corp (IBM) Stock Analysis
GoodMoat Analysis
IBM's business transformation has created a moat around its hybrid cloud and AI services, but the valuation appears unfavourable. The stock trades at a significant premium to the GoodMoat target price, suggesting a lack of margin of safety for a value investor.
Read full analysis
International Business Machines Corp (IBM) is a technology giant that has transformed from legacy hardware into a hybrid cloud and artificial intelligence (AI) company, anchored by its Red Hat acquisition. Applying the GoodMoat framework, IBM likely scores moderately on Moat Identification (Section 1), with potential advantages in switching costs from long-term enterprise contracts, strategic partnerships, and niche dominance in mainframes. However, its high debt-to-equity ratio of 1.98 and moderate revenue growth of 12.2% YoY would likely result in several 'Neutral' or 'Weak' ratings in the Quality Indicators section, particularly on balance sheet strength and growth consistency. The Decision Framework (Section 6) is clear: a stock must first pass the Moat & Quality Gate. While IBM may have an adequate moat, its quality profile is mixed, making a high business score unlikely. Crucially, the valuation assessment is unfavourable. At $241.39, the stock trades nearly 50% above the GoodMoat target of $161.31, indicating a negative margin of safety. The P/E of 21.3x and FCF yield of 5.1% do not compensate for the growth profile and financial leverage when compared to the framework's valuation bands. For a value investor, this combination of moderate business strength and a premium price does not meet the criteria for a favourable opportunity. Further investigation would require a strong, contrarian thesis on accelerated growth or debt reduction to justify the current price.
Market Cap$231.96B
Current Price$248.16
P/E Ratio21.90
Forward P/E—
PEG Ratio0.24
EPS$11.16
Book Value$34.93
P/B Ratio7.10
IBM Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use -1.1% FCF growth (CAGR)
Cash vs Debt
Net Debt: 51.0B
Revenue
57.7B
FY19
55.2B
FY20
57.4B
FY21
60.5B
FY22
61.9B
FY23
62.8B
FY24
67.5B
FY25
Net Income
9.4B
FY19
5.6B
FY20
5.7B
FY21
1.6B
FY22
7.5B
FY23
6.0B
FY24
10.6B
FY25
IBM 52-Week Range
$215.62
$313.18
50-Day MA: $261.30200-Day MA: $275.16
Did you know?
Earnings per share grew at a -1.1% CAGR.
International Business Machines Corp (IBM) Financial Summary
International Business Machines Corp (IBM) is a Technology company in the Information Technology Services industry, listed on NYSE. The stock currently trades at $248.16 with a market capitalization of $231.96B.
Key valuation metrics include a P/E ratio of 21.90, price-to-book ratio of 7.10, and EPS of $11.16. The company reports a profit margin of 15.7% and return on equity of 32.4%.
IBM Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $231.96B |
| P/E Ratio | 21.90 |
| EPS | $11.16 |
| P/B Ratio | 7.10 |
| P/S Ratio | 3.43 |
| EV/EBITDA | 15.88 |
| Dividend Yield | 2.70% |
| Profit Margin | 15.7% |
| Return on Equity | 32.4% |
| Debt/Equity | 1.98 |
IBM Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $57.71B | $9.43B |
| FY20 | $55.18B | $5.59B |
| FY21 | $57.35B | $5.74B |
| FY22 | $60.53B | $1.64B |
| FY23 | $61.86B | $7.50B |
| FY24 | $62.75B | $6.02B |
| FY25 | $67.53B | $10.59B |
International Business Machines Corp (IBM) Valuation
Based on GoodMoat's DCF model, International Business Machines Corp has a fair value estimate of $161.31. At the current price of $248.16, the stock appears 53.8% overvalued relative to our intrinsic value estimate.
IBM Quality Indicators
International Business Machines Corp maintains a profit margin of 15.7% and an operating margin of 18.2%. Return on equity stands at 32.4%. The current ratio is 0.96. Debt-to-equity ratio is 1.98.
About International Business Machines Corp
International Business Machines Corporation (IBM) is an information technology (IT) company. IBM operates in five segments: Global Technology Services (GTS), Global Business Services (GBS), Software, Systems and Technology and Global Financing. GTS primarily provides IT infrastructure services and business process services. GBS provides professional services and application management services. Software consists primarily of middleware and operating systems software. Systems and Technology provides clients with business solutions requiring advanced computing power and storage capabilities. In October 2013, International Business Machines Corporation acquired Xtify Inc. In October 2013, the Company announced that it has completed the acquisition of The Now Factory, a privately held provider of analytics software that helps communications service providers (CSPs) deliver better customer experiences and drive new revenue opportunities.
IBM Free Cash Flow
International Business Machines Corp generated $11.58B in trailing twelve-month free cash flow, representing an FCF yield of 4.99%. This moderate FCF yield indicates reasonable cash generation.
IBM Shares Outstanding
International Business Machines Corp has 0.93 billion shares outstanding at a share price of $248.16, giving it a market capitalization of $231.96B.
IBM Recent Insider Trades
Recent insider transactions at International Business Machines Corp include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| HOWARD MICHELLE J (Director) | BUY | 50 | $11891.47 |
| Miebach Michael (Director) | BUY | 434 | $101263.53 |
| FARR DAVID N (Director) | BUY | 1,000 | $304000.00 |