INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
Europe - BIT:1IBM - US4592001014 - Common Stock
213 EUR
+7.45 (+3.62%)
1IBM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 71 industry peers in the IT Services industry. While 1IBM belongs to the best of the industry regarding profitability, there are concerns on its financial health. 1IBM is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year 1IBM was profitable.
1IBM had a positive operating cash flow in the past year.
In the past 5 years 1IBM has always 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 of 3.93%. This is comparable to the rest of the industry: 1IBM outperforms 47.89% of its industry peers.
1IBM has a better Return On Equity (21.20%) than 84.51% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.55%, 1IBM is in line with its industry, outperforming 46.48% of the companies in the same industry.
1IBM had an Average Return On Invested Capital over the past 3 years of 7.26%. This is below the industry average of 11.13%.
The last Return On Invested Capital (7.55%) for 1IBM is above the 3 year average (7.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.93% | ||
| ROE | 21.2% | ||
| ROIC | 7.55% |
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
1IBM's Profit Margin of 9.11% is amongst the best of the industry. 1IBM outperforms 87.32% of its industry peers.
1IBM's Profit Margin has declined in the last couple of years.
1IBM has a better Operating Margin (15.32%) than 91.55% of its industry peers.
In the last couple of years the Operating Margin of 1IBM has grown nicely.
With a Gross Margin value of 57.57%, 1IBM perfoms like the industry average, outperforming 43.66% of the companies in the same industry.
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 | 15.32% | ||
| PM (TTM) | 9.11% | ||
| GM | 57.57% |
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.
1IBM has more shares outstanding than it did 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 3.20. This indicates that 1IBM is financially healthy and has little risk of bankruptcy at the moment.
1IBM's Altman-Z score of 3.20 is fine compared to the rest of the industry. 1IBM outperforms 66.20% of its industry peers.
The Debt to FCF ratio of 1IBM is 5.46, which is a neutral value as it means it would take 1IBM, 5.46 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of 1IBM (5.46) is worse than 60.56% of its industry peers.
A Debt/Equity ratio of 2.01 is on the high side and indicates that 1IBM has dependencies on debt financing.
The Debt to Equity ratio of 1IBM (2.01) is worse than 81.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.01 | ||
| Debt/FCF | 5.46 | ||
| Altman-Z | 3.2 |
ROIC/WACC0.86
WACC8.82%
2.3 Liquidity
A Current Ratio of 0.91 indicates that 1IBM may have some problems paying its short term obligations.
With a Current ratio value of 0.91, 1IBM is not doing good in the industry: 78.87% of the companies in the same industry are doing better.
A Quick Ratio of 0.87 indicates that 1IBM may have some problems paying its short term obligations.
1IBM has a worse Quick ratio (0.87) than 78.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.32% over the past year.
Measured over the past years, 1IBM shows a decrease in Earnings Per Share. The EPS has been decreasing by -4.21% on average per year.
Looking at the last year, 1IBM shows a small growth in Revenue. The Revenue has grown by 2.69% in the last year.
Measured over the past years, 1IBM shows a small growth in Revenue. The Revenue has been growing by 1.69% on average per year.
EPS 1Y (TTM)4.32%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%15.23%
Revenue 1Y (TTM)2.69%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%7.65%
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 6.21% on average per year.
1IBM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.94% yearly.
EPS Next Y8.66%
EPS Next 2Y7.71%
EPS Next 3Y6.93%
EPS Next 5Y6.21%
Revenue Next Year6.36%
Revenue Next 2Y5.36%
Revenue Next 3Y5.02%
Revenue Next 5Y4.94%
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.
4. Valuation
4.1 Price/Earnings Ratio
1IBM is valuated rather expensively with a Price/Earnings ratio of 23.51.
1IBM's Price/Earnings ratio is in line with the industry average.
1IBM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
Based on the Price/Forward Earnings ratio of 20.83, the valuation of 1IBM can be described as rather expensive.
1IBM's Price/Forward Earnings is on the same level as the industry average.
1IBM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.51 | ||
| Fwd PE | 20.83 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1IBM is valued a bit more expensive than 74.65% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, 1IBM is valued a bit more expensive than the industry average as 60.56% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.77 | ||
| EV/EBITDA | 18.98 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of 1IBM may justify a higher PE ratio.
PEG (NY)2.71
PEG (5Y)N/A
EPS Next 2Y7.71%
EPS Next 3Y6.93%
5. Dividend
5.1 Amount
1IBM has a Yearly Dividend Yield of 2.61%.
1IBM's Dividend Yield is a higher than the industry average which is at 7.63.
1IBM's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
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 106.31% of its income as dividend. This is not a sustainable payout ratio.
The dividend of 1IBM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP106.31%
EPS Next 2Y7.71%
EPS Next 3Y6.93%
BIT:1IBM (9/4/2025, 7:00:00 PM)
213
+7.45 (+3.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners65.2%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap198.41B
Analysts70
Price Target238.77 (12.1%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.61% |
Yearly Dividend5.7
Dividend Growth(5Y)0.83%
DP106.31%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.93%
Min EPS beat(2)4.89%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)5.93%
Min EPS beat(4)2.27%
Max EPS beat(4)12.97%
EPS beat(8)8
Avg EPS beat(8)5.15%
EPS beat(12)11
Avg EPS beat(12)4.65%
EPS beat(16)14
Avg EPS beat(16)3.57%
Revenue beat(2)2
Avg Revenue beat(2)0.68%
Min Revenue beat(2)0.01%
Max Revenue beat(2)1.34%
Revenue beat(4)2
Avg Revenue beat(4)-0.31%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)1.34%
Revenue beat(8)2
Avg Revenue beat(8)-0.52%
Revenue beat(12)4
Avg Revenue beat(12)-0.27%
Revenue beat(16)7
Avg Revenue beat(16)-1.44%
PT rev (1m)-0.94%
PT rev (3m)6.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.32%
EPS NY rev (1m)1.96%
EPS NY rev (3m)1.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.89%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.51 | ||
| Fwd PE | 20.83 | ||
| P/S | 3.63 | ||
| P/FCF | 19.77 | ||
| P/OCF | 17.5 | ||
| P/B | 8.45 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.98 |
EPS(TTM)9.06
EY4.25%
EPS(NY)10.23
Fwd EY4.8%
FCF(TTM)10.77
FCFY5.06%
OCF(TTM)12.17
OCFY5.71%
SpS58.67
BVpS25.2
TBVpS-47.87
PEG (NY)2.71
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.93% | ||
| ROE | 21.2% | ||
| ROCE | 8.85% | ||
| ROIC | 7.55% | ||
| ROICexc | 8.78% | ||
| ROICexgc | 53.5% | ||
| OM | 15.32% | ||
| PM (TTM) | 9.11% | ||
| GM | 57.57% | ||
| FCFM | 18.36% |
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 | 2.01 | ||
| Debt/FCF | 5.46 | ||
| Debt/EBITDA | 3.77 | ||
| Cap/Depr | 31.62% | ||
| Cap/Sales | 2.38% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 90.78% | ||
| Profit Quality | 201.58% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 3.2 |
F-Score5
WACC8.82%
ROIC/WACC0.86
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)4.32%
EPS 3Y1.19%
EPS 5Y-4.21%
EPS Q2Q%15.23%
EPS Next Y8.66%
EPS Next 2Y7.71%
EPS Next 3Y6.93%
EPS Next 5Y6.21%
Revenue 1Y (TTM)2.69%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%7.65%
Revenue Next Year6.36%
Revenue Next 2Y5.36%
Revenue Next 3Y5.02%
Revenue Next 5Y4.94%
EBIT growth 1Y8.54%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year72.78%
EBIT Next 3Y26.23%
EBIT Next 5Y19.31%
FCF growth 1Y14.17%
FCF growth 3Y7.1%
FCF growth 5Y0.76%
OCF growth 1Y8.18%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%