INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
BIT:1IBM - Euronext Milan - US4592001014 - Common Stock - Currency: EUR
Overall 1IBM gets a fundamental rating of 4 out of 10. We evaluated 1IBM against 69 industry peers in the IT Services industry. There are concerns on the financial health of 1IBM while its profitability can be described as average. 1IBM is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year 1IBM was profitable.
In the past year 1IBM had a positive cash flow from operations.
Each year in the past 5 years 1IBM has been profitable.
Each year in the past 5 years 1IBM had a positive operating cash flow.
1.2 Ratios
1IBM has a Return On Assets (3.76%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 20.36%, 1IBM belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
With a Return On Invested Capital value of 7.10%, 1IBM perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for 1IBM is below the industry average of 10.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 20.36% | ||
| ROIC | 7.1% |
ROA(3y)3.74%
ROA(5y)3.83%
ROE(3y)20.94%
ROE(5y)24.07%
ROIC(3y)7.26%
ROIC(5y)6.26%
1.3 Margins
With an excellent Profit Margin value of 8.71%, 1IBM belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
In the last couple of years the Profit Margin of 1IBM has declined.
1IBM has a Operating Margin of 14.64%. This is amongst the best in the industry. 1IBM outperforms 90.00% of its industry peers.
1IBM's Operating Margin has improved in the last couple of years.
1IBM has a Gross Margin (57.04%) which is in line with its industry peers.
In the last couple of years the Gross Margin of 1IBM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.64% | ||
| PM (TTM) | 8.71% | ||
| GM | 57.04% |
OM growth 3Y13.36%
OM growth 5Y1.77%
PM growth 3Y-1.4%
PM growth 5Y-10.1%
GM growth 3Y1.05%
GM growth 5Y0.73%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 1IBM is destroying value.
The number of shares outstanding for 1IBM has been increased compared to 1 year ago.
Compared to 5 years ago, 1IBM has more shares outstanding
1IBM has a better debt/assets ratio than last year.
2.2 Solvency
1IBM has an Altman-Z score of 3.24. This indicates that 1IBM is financially healthy and has little risk of bankruptcy at the moment.
1IBM has a Altman-Z score of 3.24. This is in the better half of the industry: 1IBM outperforms 65.71% of its industry peers.
1IBM has a debt to FCF ratio of 5.03. This is a neutral value as 1IBM would need 5.03 years to pay back of all of its debts.
1IBM has a Debt to FCF ratio (5.03) which is comparable to the rest of the industry.
1IBM has a Debt/Equity ratio of 2.10. This is a high value indicating a heavy dependency on external financing.
1IBM's Debt to Equity ratio of 2.10 is on the low side compared to the rest of the industry. 1IBM is outperformed by 82.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 5.03 | ||
| Altman-Z | 3.24 |
ROIC/WACC0.8
WACC8.9%
2.3 Liquidity
1IBM has a Current Ratio of 1.01. This is a normal value and indicates that 1IBM is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.01, 1IBM is doing worse than 71.43% of the companies in the same industry.
1IBM has a Quick Ratio of 1.01. This is a bad value and indicates that 1IBM is not financially healthy enough and could expect problems in meeting its short term obligations.
1IBM has a worse Quick ratio (0.97) than 72.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
1IBM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.22%.
1IBM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.21% yearly.
The Revenue has been growing slightly by 1.23% in the past year.
1IBM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
EPS 1Y (TTM)3.22%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%-4.76%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.55%
3.2 Future
Based on estimates for the next years, 1IBM will show a small growth in Earnings Per Share. The EPS will grow by 7.16% on average per year.
The Revenue is expected to grow by 4.68% on average over the next years.
EPS Next Y4.66%
EPS Next 2Y5.5%
EPS Next 3Y6.12%
EPS Next 5Y7.16%
Revenue Next Year3.71%
Revenue Next 2Y4.18%
Revenue Next 3Y4.17%
Revenue Next 5Y4.68%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.97, the valuation of 1IBM can be described as rather expensive.
1IBM's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of 1IBM to the average of the S&P500 Index (24.12), we can say 1IBM is valued inline with the index average.
1IBM is valuated rather expensively with a Price/Forward Earnings ratio of 21.38.
1IBM's Price/Forward Earnings ratio is in line with the industry average.
1IBM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.97 | ||
| Fwd PE | 21.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1IBM is valued a bit more expensive than 71.43% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as 1IBM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.17 | ||
| EV/EBITDA | 19.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
1IBM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.15
PEG (5Y)N/A
EPS Next 2Y5.5%
EPS Next 3Y6.12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.80%, 1IBM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 7.38, 1IBM pays a bit more dividend than its industry peers.
1IBM's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.8% |
5.2 History
The dividend of 1IBM has a limited annual growth rate of 0.83%.
Dividend Growth(5Y)0.83%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
1IBM pays out 112.79% of its income as dividend. This is not a sustainable payout ratio.
1IBM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP112.79%
EPS Next 2Y5.5%
EPS Next 3Y6.12%
BIT:1IBM (4/23/2025, 7:00:00 PM)
216.7
+6.85 (+3.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners64.25%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap201.40B
Analysts72.59
Price Target222.22 (2.55%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.8% |
Yearly Dividend5.89
Dividend Growth(5Y)0.83%
DP112.79%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.34%
Min EPS beat(2)3.59%
Max EPS beat(2)13.1%
EPS beat(4)4
Avg EPS beat(4)7.12%
Min EPS beat(4)2.27%
Max EPS beat(4)13.1%
EPS beat(8)8
Avg EPS beat(8)5.49%
EPS beat(12)11
Avg EPS beat(12)4.31%
EPS beat(16)14
Avg EPS beat(16)3.32%
Revenue beat(2)1
Avg Revenue beat(2)-0.44%
Min Revenue beat(2)-0.93%
Max Revenue beat(2)0.06%
Revenue beat(4)1
Avg Revenue beat(4)-0.64%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)0.06%
Revenue beat(8)1
Avg Revenue beat(8)-0.88%
Revenue beat(12)4
Avg Revenue beat(12)-0.27%
Revenue beat(16)6
Avg Revenue beat(16)-2.96%
PT rev (1m)-6.4%
PT rev (3m)5.3%
EPS NQ rev (1m)1.32%
EPS NQ rev (3m)2.97%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)0.2%
Revenue NQ rev (1m)2.36%
Revenue NQ rev (3m)1.24%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)-0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.97 | ||
| Fwd PE | 21.38 | ||
| P/S | 3.64 | ||
| P/FCF | 18.17 | ||
| P/OCF | 16.74 | ||
| P/B | 8.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.26 |
EPS(TTM)9.04
EY4.17%
EPS(NY)10.14
Fwd EY4.68%
FCF(TTM)11.93
FCFY5.5%
OCF(TTM)12.95
OCFY5.97%
SpS59.6
BVpS25.5
TBVpS-48.92
PEG (NY)5.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 20.36% | ||
| ROCE | 8.32% | ||
| ROIC | 7.1% | ||
| ROICexc | 8.43% | ||
| ROICexgc | 53.64% | ||
| OM | 14.64% | ||
| PM (TTM) | 8.71% | ||
| GM | 57.04% | ||
| FCFM | 20.01% |
ROA(3y)3.74%
ROA(5y)3.83%
ROE(3y)20.94%
ROE(5y)24.07%
ROIC(3y)7.26%
ROIC(5y)6.26%
ROICexc(3y)8.29%
ROICexc(5y)7.07%
ROICexgc(3y)40.75%
ROICexgc(5y)31.79%
ROCE(3y)8.5%
ROCE(5y)7.33%
ROICexcg growth 3Y26.58%
ROICexcg growth 5Y17.04%
ROICexc growth 3Y17.55%
ROICexc growth 5Y7.25%
OM growth 3Y13.36%
OM growth 5Y1.77%
PM growth 3Y-1.4%
PM growth 5Y-10.1%
GM growth 3Y1.05%
GM growth 5Y0.73%
F-Score5
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 5.03 | ||
| Debt/EBITDA | 4.05 | ||
| Cap/Depr | 22.81% | ||
| Cap/Sales | 1.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 98.12% | ||
| Profit Quality | 229.69% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 3.24 |
F-Score5
WACC8.9%
ROIC/WACC0.8
Cap/Depr(3y)35.46%
Cap/Depr(5y)39.55%
Cap/Sales(3y)2.66%
Cap/Sales(5y)3.73%
Profit Quality(3y)294.17%
Profit Quality(5y)264.98%
High Growth Momentum
Growth
EPS 1Y (TTM)3.22%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%-4.76%
EPS Next Y4.66%
EPS Next 2Y5.5%
EPS Next 3Y6.12%
EPS Next 5Y7.16%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.55%
Revenue Next Year3.71%
Revenue Next 2Y4.18%
Revenue Next 3Y4.17%
Revenue Next 5Y4.68%
EBIT growth 1Y3.37%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year53.02%
EBIT Next 3Y20.05%
EBIT Next 5Y10.85%
FCF growth 1Y40.14%
FCF growth 3Y7.1%
FCF growth 5Y0.76%
OCF growth 1Y24.5%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%