INTL BUSINESS MACHINES CORP (1IBM.MI) Stock Fundamental Analysis
BIT:1IBM - Euronext Milan - US4592001014 - Common Stock - Currency: EUR
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 has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, 1IBM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year 1IBM was profitable.
1IBM had a positive operating cash flow in the past year.
1IBM had positive earnings in each of the past 5 years.
1IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
1IBM has a Return On Assets (3.93%) which is comparable to the rest of the industry.
1IBM's Return On Equity of 21.20% is amongst the best of the industry. 1IBM outperforms 83.10% of its industry peers.
1IBM's Return On Invested Capital of 7.55% is in line compared to the rest of the industry. 1IBM outperforms 45.07% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for 1IBM is below the industry average of 11.04%.
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 has a Profit Margin of 9.11%. This is amongst the best in the industry. 1IBM outperforms 87.32% of its industry peers.
In the last couple of years the Profit Margin of 1IBM has declined.
1IBM's Operating Margin of 15.32% is amongst the best of the industry. 1IBM outperforms 90.14% of its industry peers.
1IBM's Operating Margin has improved in the last couple of years.
The Gross Margin of 1IBM (57.57%) is comparable to the rest of the 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
1IBM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, 1IBM has more shares outstanding
Compared to 5 years ago, 1IBM has more shares outstanding
The debt/assets ratio for 1IBM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.26 indicates that 1IBM is not in any danger for bankruptcy at the moment.
1IBM's Altman-Z score of 3.26 is fine compared to the rest of the industry. 1IBM outperforms 69.01% 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.
With a Debt to FCF ratio value of 5.46, 1IBM perfoms like the industry average, outperforming 40.85% of the companies in the same industry.
A Debt/Equity ratio of 2.01 is on the high side and indicates that 1IBM has dependencies on debt financing.
With a Debt to Equity ratio value of 2.01, 1IBM is not doing good in the industry: 81.69% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.01 | ||
| Debt/FCF | 5.46 | ||
| Altman-Z | 3.26 |
ROIC/WACC0.77
WACC9.86%
2.3 Liquidity
A Current Ratio of 0.91 indicates that 1IBM may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.91, 1IBM is doing worse than 77.46% of the companies in the same industry.
1IBM has a Quick Ratio of 0.91. 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's Quick ratio of 0.87 is on the low side compared to the rest of the industry. 1IBM is outperformed by 78.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
1IBM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.32%.
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.
1IBM shows a small growth in Revenue. In the last year, the Revenue has grown by 2.69%.
1IBM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.69% yearly.
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 6.40% on average per year.
Based on estimates for the next years, 1IBM will show a small growth in Revenue. The Revenue will grow by 4.75% on average per year.
EPS Next Y6.58%
EPS Next 2Y6.55%
EPS Next 3Y6.37%
EPS Next 5Y6.4%
Revenue Next Year6.05%
Revenue Next 2Y5.24%
Revenue Next 3Y4.96%
Revenue Next 5Y4.75%
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
The Price/Earnings ratio is 24.82, which indicates a rather expensive current valuation of 1IBM.
The rest of the industry has a similar Price/Earnings ratio as 1IBM.
1IBM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.48.
A Price/Forward Earnings ratio of 22.48 indicates a rather expensive valuation of 1IBM.
1IBM's Price/Forward Earnings is on the same level as the industry average.
1IBM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.04.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.82 | ||
| Fwd PE | 22.48 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1IBM indicates a slightly more expensive valuation: 1IBM is more expensive than 73.24% of the companies listed in the same industry.
61.97% of the companies in the same industry are cheaper than 1IBM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.89 | ||
| EV/EBITDA | 19.87 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates 1IBM does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of 1IBM may justify a higher PE ratio.
PEG (NY)3.77
PEG (5Y)N/A
EPS Next 2Y6.55%
EPS Next 3Y6.37%
5. Dividend
5.1 Amount
1IBM has a Yearly Dividend Yield of 2.69%. Purely for dividend investing, there may be better candidates out there.
1IBM's Dividend Yield is a higher than the industry average which is at 7.24.
Compared to an average S&P500 Dividend Yield of 2.39, 1IBM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.69% |
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
106.31% of the earnings are spent on dividend by 1IBM. This is not a sustainable payout ratio.
1IBM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP106.31%
EPS Next 2Y6.55%
EPS Next 3Y6.37%
BIT:1IBM (7/28/2025, 7:00:00 PM)
226.35
-16.2 (-6.68%)
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 Cap210.85B
Analysts71.11
Price Target241.04 (6.49%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.69% |
Yearly Dividend5.74
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)6.04%
PT rev (3m)8.47%
EPS NQ rev (1m)-0.27%
EPS NQ rev (3m)-1.32%
EPS NY rev (1m)-0.24%
EPS NY rev (3m)1.83%
Revenue NQ rev (1m)0.23%
Revenue NQ rev (3m)2.89%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)2.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.82 | ||
| Fwd PE | 22.48 | ||
| P/S | 3.84 | ||
| P/FCF | 20.89 | ||
| P/OCF | 18.49 | ||
| P/B | 8.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.87 |
EPS(TTM)9.12
EY4.03%
EPS(NY)10.07
Fwd EY4.45%
FCF(TTM)10.84
FCFY4.79%
OCF(TTM)12.24
OCFY5.41%
SpS59.02
BVpS25.35
TBVpS-48.16
PEG (NY)3.77
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 | 3.26 |
F-Score5
WACC9.86%
ROIC/WACC0.77
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 Y6.58%
EPS Next 2Y6.55%
EPS Next 3Y6.37%
EPS Next 5Y6.4%
Revenue 1Y (TTM)2.69%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%7.65%
Revenue Next Year6.05%
Revenue Next 2Y5.24%
Revenue Next 3Y4.96%
Revenue Next 5Y4.75%
EBIT growth 1Y8.54%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year72.78%
EBIT Next 3Y26.23%
EBIT Next 5Y11.52%
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%