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 71 industry peers in the IT Services industry. While 1IBM is still in line with the averages on profitability rating, there are concerns on its financial health. 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.
1IBM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
1IBM has a Return On Assets of 3.76%. This is comparable to the rest of the industry: 1IBM outperforms 45.07% of its industry peers.
Looking at the Return On Equity, with a value of 20.36%, 1IBM belongs to the top of the industry, outperforming 85.92% of the companies in the same industry.
1IBM has a Return On Invested Capital (7.22%) which is comparable to the rest of the industry.
1IBM had an Average Return On Invested Capital over the past 3 years of 7.26%. This is below the industry average of 10.64%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 20.36% | ||
| ROIC | 7.22% |
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 8.71% is amongst the best of the industry. 1IBM outperforms 90.14% of its industry peers.
In the last couple of years the Profit Margin of 1IBM has declined.
With an excellent Operating Margin value of 14.89%, 1IBM belongs to the best of the industry, outperforming 92.96% of the companies in the same industry.
1IBM's Operating Margin has improved in the last couple of years.
1IBM has a Gross Margin (57.04%) which is comparable to the rest of the industry.
1IBM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.89% | ||
| 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.
Compared to 1 year ago, 1IBM has more shares outstanding
Compared to 5 years ago, 1IBM has more shares outstanding
Compared to 1 year ago, 1IBM has an improved debt to assets ratio.
2.2 Solvency
1IBM has an Altman-Z score of 3.47. This indicates that 1IBM is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.47, 1IBM is doing good in the industry, outperforming 69.01% of the companies in the same industry.
The Debt to FCF ratio of 1IBM is 5.06, which is a neutral value as it means it would take 1IBM, 5.06 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 5.06, 1IBM perfoms like the industry average, outperforming 40.85% of the companies in the same industry.
1IBM has a Debt/Equity ratio of 2.10. This is a high value indicating a heavy dependency on external financing.
1IBM has a worse Debt to Equity ratio (2.10) than 83.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.1 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 3.47 |
ROIC/WACC0.79
WACC9.1%
2.3 Liquidity
A Current Ratio of 1.01 indicates that 1IBM should not have too much problems paying its short term obligations.
1IBM has a worse Current ratio (1.01) than 74.65% of its industry peers.
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.
With a Quick ratio value of 0.97, 1IBM is not doing good in the industry: 74.65% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.22% over the past year.
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
The Earnings Per Share is expected to grow by 6.40% on average over the next years.
The Revenue is expected to grow by 4.75% on average over the next years.
EPS Next Y6.83%
EPS Next 2Y6.59%
EPS Next 3Y6.29%
EPS Next 5Y6.4%
Revenue Next Year5.51%
Revenue Next 2Y4.94%
Revenue Next 3Y4.74%
Revenue Next 5Y4.75%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
1IBM is valuated quite expensively with a Price/Earnings ratio of 28.51.
Compared to the rest of the industry, the Price/Earnings ratio of 1IBM is on the same level as its industry peers.
1IBM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 24.92, 1IBM is valued on the expensive side.
1IBM's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, 1IBM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.51 | ||
| Fwd PE | 24.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1IBM is valued a bit more expensive than the industry average as 73.24% of the companies are valued more cheaply.
60.56% 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 | 21.74 | ||
| EV/EBITDA | 22.12 |
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)4.18
PEG (5Y)N/A
EPS Next 2Y6.59%
EPS Next 3Y6.29%
5. Dividend
5.1 Amount
1IBM has a Yearly Dividend Yield of 2.30%.
1IBM's Dividend Yield is a higher than the industry average which is at 6.93.
Compared to an average S&P500 Dividend Yield of 2.42, 1IBM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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 2Y6.59%
EPS Next 3Y6.29%
BIT:1IBM (6/27/2025, 7:00:00 PM)
249.5
-1.45 (-0.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners65.15%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap231.89B
Analysts72.59
Price Target227.31 (-8.89%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
Yearly Dividend5.71
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)8.28%
Min EPS beat(2)3.59%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)7.09%
Min EPS beat(4)2.27%
Max EPS beat(4)12.97%
EPS beat(8)8
Avg EPS beat(8)5.47%
EPS beat(12)11
Avg EPS beat(12)4.29%
EPS beat(16)14
Avg EPS beat(16)3.31%
Revenue beat(2)1
Avg Revenue beat(2)-0.46%
Min Revenue beat(2)-0.93%
Max Revenue beat(2)0.01%
Revenue beat(4)1
Avg Revenue beat(4)-0.65%
Min Revenue beat(4)-1.66%
Max Revenue beat(4)0.01%
Revenue beat(8)1
Avg Revenue beat(8)-0.89%
Revenue beat(12)4
Avg Revenue beat(12)-0.27%
Revenue beat(16)6
Avg Revenue beat(16)-2.96%
PT rev (1m)2.29%
PT rev (3m)-7.09%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)1.21%
EPS NY rev (1m)2.08%
EPS NY rev (3m)1.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.36%
Revenue NY rev (1m)1.74%
Revenue NY rev (3m)1.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.51 | ||
| Fwd PE | 24.92 | ||
| P/S | 4.33 | ||
| P/FCF | 21.74 | ||
| P/OCF | 19.91 | ||
| P/B | 10.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.12 |
EPS(TTM)8.75
EY3.51%
EPS(NY)10.01
Fwd EY4.01%
FCF(TTM)11.47
FCFY4.6%
OCF(TTM)12.53
OCFY5.02%
SpS57.68
BVpS24.68
TBVpS-47.35
PEG (NY)4.18
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.76% | ||
| ROE | 20.36% | ||
| ROCE | 8.46% | ||
| ROIC | 7.22% | ||
| ROICexc | 8.58% | ||
| ROICexgc | 54.54% | ||
| OM | 14.89% | ||
| PM (TTM) | 8.71% | ||
| GM | 57.04% | ||
| FCFM | 19.89% |
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 | 5.06 | ||
| Debt/EBITDA | 4.01 | ||
| Cap/Depr | 24.38% | ||
| Cap/Sales | 1.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 97.03% | ||
| Profit Quality | 228.33% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 3.47 |
F-Score5
WACC9.1%
ROIC/WACC0.79
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 Y6.83%
EPS Next 2Y6.59%
EPS Next 3Y6.29%
EPS Next 5Y6.4%
Revenue 1Y (TTM)1.23%
Revenue growth 3Y3.05%
Revenue growth 5Y1.69%
Sales Q2Q%0.55%
Revenue Next Year5.51%
Revenue Next 2Y4.94%
Revenue Next 3Y4.74%
Revenue Next 5Y4.75%
EBIT growth 1Y5.13%
EBIT growth 3Y16.81%
EBIT growth 5Y3.49%
EBIT Next Year59.42%
EBIT Next 3Y21.07%
EBIT Next 5Y10.85%
FCF growth 1Y39.31%
FCF growth 3Y7.1%
FCF growth 5Y0.76%
OCF growth 1Y24.5%
OCF growth 3Y1.67%
OCF growth 5Y-1.86%