A Business at a Glance
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INTERNATIONAL BUSINESS MACHINES CORP
IBM
$203.1B
Mkt Cap
$214.19
+3.65%
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a current P/E ratio of 19.2, compared to its historical median P/E of 17.7. The stock is currently considered Fair based on its historical valuation range.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a 5-year average return on invested capital (ROIC) of 9.9%. This is below average and may indicate limited pricing power.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a market capitalization of $201.3B. It is classified as a mega-cap stock.
Yes, INTERNATIONAL BUSINESS MACHINES CORP (IBM) pays a dividend with a trailing twelve-month yield of 3.12%.
Based on historical P/E analysis, INTERNATIONAL BUSINESS MACHINES CORP (IBM) appears fair. The current P/E of 19.2 is 9% above its historical median of 17.7. The estimated fair value CAGR (P/E method) is -4.0%.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) operates in the Computer & Office Equipment industry, within the Technology sector.
IBM is a globally integrated enterprise that creates value for clients by leveraging hybrid cloud and artificial intelligence to support digital transformations and modernize mission-critical applications. The company operates through four primary segments: Software, which includes hybrid cloud platforms, data and AI capabilities, and automation solutions; Consulting, which integrates strategy, experience design, technology and operations expertise across industries to deliver transformation services; Infrastructure, which provides on-premises and cloud-based server and storage solutions designed for mission-critical and AI workloads; and Financing, which facilitates client acquisition of hardware, software and services through credit and commercial financing. IBM's business model combines recurring software revenue, professional services, and infrastructure sales, supported by deep incumbency in enterprise systems, a broad ecosystem of strategic partners including hyperscalers and system integrators, and one of the world's leading research organizations. The company differentiates through breadth and depth of expertise across technologies and industries, strong client relationships and trust, and the ability to integrate diverse capabilities to solve complex business problems. IBM serves global enterprises across multiple industries and geographies, competing on technology innovation, performance, quality, brand, and the ability to deliver measurable business value.
【AI-driven software acceleration】 Management expects software to grow 10%+ in 2026, driven by accelerating organic growth, strong recurring revenue momentum, and generative AI traction across the portfolio, with consulting expected to grow at low to mid-single digits supported by a $32 billion backlog with over 25% GenAI penetration. Infrastructure revenue is expected to decline low single digits as Z17 product cycle dynamics balance early-year strength, though the company views this as its strongest Z cycle given AI innovation value delivered to clients. The company expects to expand operating pre-tax margins by approximately 1 point in 2026 through portfolio mix, ongoing productivity initiatives, and revenue scale, while absorbing approximately $600 million of dilution from the Confluent acquisition and realizing an incremental $1 billion of productivity savings to reach $5.5 billion in annual run-rate savings by year-end 2026. Free cash flow is expected to grow approximately $1 billion year-over-year, driven primarily by adjusted EBITDA growth, with headwinds from higher cash taxes, increased capital expenditures, and higher net interest expense.
| Metric | Target | Period |
|---|---|---|
| Revenue growth (constant currency) | 5%+ | FY2026 |
| Free cash flow growth | approximately $1 billion year-over-year | FY2026 |
| Software revenue growth | 10%+ | FY2026 |
| Consulting revenue growth | low to mid-single digits | FY2026 |
| Infrastructure revenue growth | down low single digits | FY2026 |
| Operating pre-tax margin expansion | approximately 1 point | FY2026 |
| Confluent dilution | approximately $600 million | FY2026 |
| Productivity savings (incremental) | $1 billion | FY2026 |
Revenue growth (constant currency) (FY2026): “The strong start to the year drives our confidence in delivering constant currency revenue growth of 5%+ in 2026”
Free cash flow growth (FY2026): “we believe it is prudent to maintain our guidance, even as the underlying performance and execution are off to an encouraging start. The combination of our focused portfolio, investment in innovation, and our diversity across businesses drives the durability of our performance. Our revenue expectations are underpinned by our accelerating software business, which we now expect to grow 10%+ this year. In consulting, the quality of our backlog and momentum in gen AI with backlog penetration at about 30% continue to support an acceleration in revenue growth to low to mid-single digits for the year. We are off to a great start with Z17, and four quarters into Z17's launch, we prudently continue to expect infrastructure revenue to be down low single digits for the year, representing about a half a point impact to IBM. We remain confident this will be our strongest z cycle given the AI innovation value we are delivering to clients. Last quarter, we disclosed that we anticipated absorbing about $600 million of dilution from Confluent in 2026, driven largely by stock-based compensation and interest expense. While we are absorbing incremental dilution given the early closing of Confluent, actions we are taking to accelerate our cost synergies enable us to stay on track to expand operating pre-tax margins by about a point this year. For free cash flow, we continue to expect to grow about $1 billion for the full year”
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2025 Earnings Call, Q3 FY2025 Earnings Call, Q2 FY2025 Earnings Call, Q1 FY2025 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 68.9B | 67.5B | 62.8B | 61.9B | 60.5B | 57.4B |
| Net Income | 10.8B | 10.6B | 6.0B | 7.5B | 1.6B | 5.7B |
| EPS | $11.49 | $11.17 | $6.43 | $8.14 | $1.80 | $6.35 |
| Free Cash Flow | 12.9B | 12.1B | 12.4B | 12.7B | 9.1B | 10.7B |
| ROIC | 0.0% | 15.0% | 10.1% | 12.2% | 3.1% | 9.2% |
| Gross Margin | 58.4% | 58.2% | 56.7% | 55.4% | 54.0% | 54.9% |
| Debt/Equity | 2.24 | 2.18 | 2.32 | 2.95 | 2.68 | 3.28 |
| Dividends/Share | $6.68 | $6.71 | $6.67 | $6.63 | $6.59 | $6.55 |
| Operating Income | 0 | 12.3B | 7.5B | 10.3B | 2.2B | 7.0B |
| Operating Margin | 0.0% | 18.2% | 12.0% | 16.6% | 3.7% | 12.2% |
| ROE | 32.6% | 35.3% | 24.2% | 33.7% | 8.0% | 29.1% |
| Shares Outstanding | 940M | 948M | 937M | 922M | 911M | 904M |
| Metric | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | |||||||||||||
| Revenue | 92.8B | 81.7B | 79.9B | 79.1B | 79.6B | 57.7B | 55.2B | 57.4B | 60.5B | 61.9B | 62.8B | 67.5B | 68.9B |
| Gross Margin | 50.0% | 49.8% | 48.2% | 46.7% | 46.4% | 54.6% | 55.9% | 54.9% | 54.0% | 55.4% | 56.7% | 58.2% | 58.4% |
| R&D | 5.4B | 5.2B | 5.7B | 5.6B | 5.4B | 5.9B | 6.3B | 6.5B | 6.6B | 6.8B | 7.5B | 8.3B | 8.5B |
| SG&A | 23.2B | 20.4B | 20.9B | 19.7B | 19.4B | 18.7B | 20.6B | 18.7B | 18.6B | 19.0B | 19.7B | 20.1B | 20.3B |
| EBIT | 16.7B | 16.2B | 13.0B | 12.0B | 12.1B | 10.8B | 5.5B | 7.0B | 2.2B | 10.3B | 7.5B | 12.3B | 0 |
| Op. Margin | 18.0% | 19.9% | 16.2% | 15.2% | 15.2% | 18.8% | 10.0% | 12.2% | 3.7% | 16.6% | 12.0% | 18.2% | 0.0% |
| Net Income | 12.0B | 13.2B | 11.9B | 5.8B | 8.7B | 9.4B | 5.6B | 5.7B | 1.6B | 7.5B | 6.0B | 10.6B | 10.8B |
| Net Margin | 13.0% | 16.1% | 14.9% | 7.3% | 11.0% | 16.3% | 10.1% | 10.0% | 2.7% | 12.1% | 9.6% | 15.7% | 15.6% |
| Non-Recurring | -3.4B | -71M | 0 | 0 | 0 | 138M | 253M | 0 | 0 | 435M | 692M | 653M | 673M |
| Returns on Capital | |||||||||||||
| ROIC | 27.9% | 30.6% | 26.0% | 14.2% | 17.1% | 14.8% | 6.8% | 9.2% | 3.1% | 12.2% | 10.1% | 15.0% | 0.0% |
| ROE | 69.4% | 101.0% | 73.0% | 32.1% | 50.8% | 50.1% | 27.0% | 29.1% | 8.0% | 33.7% | 24.2% | 35.3% | 32.6% |
| ROA | 9.9% | 11.6% | 10.4% | 4.7% | 7.0% | 6.8% | 3.6% | 4.0% | 1.3% | 5.7% | 4.4% | 7.3% | 6.9% |
| Cash Flow | |||||||||||||
| Op. Cash Flow | 16.9B | 17.3B | 17.1B | 16.7B | 15.2B | 14.8B | 18.2B | 12.8B | 10.4B | 13.9B | 13.4B | 13.2B | 14.0B |
| Free Cash Flow | 13.1B | 13.7B | 13.5B | 13.5B | 11.9B | 12.5B | 15.6B | 10.7B | 9.1B | 12.7B | 12.4B | 12.1B | 12.9B |
| Owner Earnings | 11.9B | 12.9B | 12.2B | 11.6B | 10.3B | 8.0B | 10.6B | 5.4B | 4.6B | 8.4B | 7.5B | 6.5B | 297M |
| CapEx | 3.7B | 3.6B | 3.6B | 3.2B | 3.4B | 2.3B | 2.6B | 2.1B | 1.3B | 1.2B | 1.0B | 1.1B | 1.1B |
| Maint. CapEx | 4.5B | 3.9B | 4.4B | 4.5B | 4.5B | 6.1B | 6.7B | 6.4B | 4.8B | 4.4B | 4.7B | 5.0B | 11.9B |
| Growth CapEx | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| D&A | 4.5B | 3.9B | 4.4B | 4.5B | 4.5B | 6.1B | 6.7B | 6.4B | 4.8B | 4.4B | 4.7B | 5.0B | 11.9B |
| CapEx/OCF | 22.2% | 21.0% | 20.9% | 19.3% | 22.3% | 15.5% | 14.4% | 16.1% | 12.9% | 8.9% | 7.8% | 8.3% | 7.7% |
| Capital Allocation | |||||||||||||
| Dividends Paid | 4.3B | 4.9B | 5.3B | 5.5B | 5.7B | 5.7B | 5.8B | 5.9B | 5.9B | 6.0B | 6.1B | 6.3B | 6.3B |
| Dividend Yield | 3.9% | 5.2% | 5.7% | 5.7% | 6.3% | 6.5% | 6.9% | 6.1% | 5.6% | 5.2% | 3.6% | 2.5% | 3.1% |
| Share Buybacks | 13.7B | 4.6B | 3.5B | 4.3B | 4.4B | 1.4B | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Buyback Yield | 13.2% | 5.2% | 3.3% | 4.3% | 5.8% | 1.5% | N/A | N/A | N/A | N/A | N/A | N/A | 0.0% |
| Stock-Based Comp | 512M | 468M | 544M | 534M | 510M | 679M | 937M | 982M | 987M | 1.1B | 1.3B | 1.7B | 1.8B |
| Debt Repayment | 4.6B | 5.6B | 6.4B | 6.8B | 8.5B | 12.9B | 13.4B | 8.6B | 6.8B | 5.1B | 6.6B | 5.5B | 5.5B |
| Balance Sheet | |||||||||||||
| Net Debt | 31.8B | 31.1B | 32.4B | 33.1B | 40.9B | 66.8B | 58.3B | 55.3B | 50.9B | 53.3B | 49.5B | 57.4B | 63.1B |
| Cash & Equiv. | 8.5B | 7.7B | 7.8B | 12.0B | 11.4B | 8.2B | 13.2B | 6.7B | 7.9B | 13.1B | 13.9B | 13.6B | 10.8B |
| Long-Term Debt | 35.0B | 33.4B | 34.7B | 39.8B | 35.6B | 54.1B | 54.2B | 44.9B | 46.2B | 50.1B | 49.9B | 54.8B | 57.7B |
| Debt/Equity | 3.39 | 2.76 | 2.24 | 2.60 | 3.15 | 3.63 | 3.50 | 3.28 | 2.68 | 2.95 | 2.32 | 2.18 | 2.24 |
| Interest Coverage | 34.6 | 34.7 | 20.6 | 19.5 | 16.7 | 8.1 | 4.3 | 6.1 | 1.8 | 6.4 | 4.4 | 6.3 | 6.3 |
| Equity | 11.9B | 14.3B | 18.2B | 17.6B | 16.8B | 20.8B | 20.6B | 18.9B | 21.9B | 22.5B | 27.3B | 32.6B | 33.0B |
| Total Assets | 117.3B | 110.5B | 117.5B | 125.4B | 123.4B | 152.2B | 156.0B | 132.0B | 127.2B | 135.2B | 137.2B | 151.9B | 156.2B |
| Total Liabilities | 105.3B | 96.1B | 99.1B | 107.6B | 106.5B | 131.2B | 135.2B | 113.0B | 105.2B | 112.6B | 109.8B | 119.1B | 123.2B |
| Intangibles | 3.1B | 3.5B | 4.7B | 3.7B | 3.1B | 15.2B | 13.7B | 12.5B | 11.2B | 11.0B | 10.7B | 11.4B | 14.6B |
| Retained Earnings | 137.8B | 146.1B | 152.8B | 153.1B | 159.2B | 163.0B | 162.7B | 154.2B | 149.8B | 151.3B | 151.2B | 155.6B | 155.3B |
| Working Capital | 7.8B | 8.2B | 7.6B | 12.4B | 10.9B | 719M | -704M | -4.1B | -2.4B | -1.2B | 1.3B | -1.7B | -8.2B |
| Current Assets | 47.4B | 42.5B | 43.9B | 49.7B | 49.1B | 38.4B | 39.2B | 29.5B | 29.1B | 32.9B | 34.5B | 36.9B | 31.9B |
| Current Liabilities | 39.6B | 34.3B | 36.3B | 37.4B | 38.2B | 37.7B | 39.9B | 33.6B | 31.5B | 34.1B | 33.1B | 38.7B | 40.1B |
| Per Share Data | |||||||||||||
| EPS | 11.90 | 13.42 | 12.38 | 6.14 | 9.52 | 10.56 | 6.23 | 6.35 | 1.80 | 8.14 | 6.43 | 11.17 | 11.49 |
| Owner EPS | 11.74 | 13.16 | 12.68 | 12.43 | 11.19 | 8.99 | 11.77 | 5.97 | 5.10 | 9.12 | 7.97 | 6.81 | 0.32 |
| Book Value | 11.75 | 14.51 | 19.03 | 18.78 | 18.32 | 23.34 | 22.96 | 20.90 | 24.10 | 24.45 | 29.15 | 34.43 | 35.08 |
| Cash Flow/Share | 16.70 | 17.56 | 17.82 | 17.85 | 16.63 | 16.54 | 20.28 | 14.15 | 11.46 | 15.12 | 14.35 | 13.91 | 24.08 |
| Dividends/Share | 4.22 | 4.98 | 5.50 | 5.90 | 6.21 | 6.43 | 6.51 | 6.55 | 6.59 | 6.63 | 6.67 | 6.71 | 6.68 |
| Shares Out. | 1.0B | 982.9M | 959.0M | 937.0M | 916.8M | 893.1M | 897.3M | 904.4M | 910.6M | 921.6M | 936.7M | 948.3M | 939.9M |
| Valuation | |||||||||||||
| P/E Ratio | 8.6 | 6.7 | 9.1 | 17.6 | 8.7 | 9.8 | 15.5 | 17.7 | 69.3 | 18.8 | 33.6 | 27.2 | 18.6 |
| P/FCF | 7.5 | 6.1 | 7.6 | 7.2 | 6.1 | 7.1 | 5.6 | 9.5 | 12.5 | 11.1 | 16.3 | 23.8 | 15.6 |
| EV/EBIT | 8.4 | 7.8 | 11.5 | 11.9 | 9.7 | 12.8 | 22.0 | 20.0 | 66.8 | 16.7 | 30.5 | 26.2 | N/A |
| Price/Book | 8.7 | 6.2 | 5.9 | 5.8 | 4.5 | 4.5 | 4.2 | 5.4 | 5.2 | 6.3 | 7.4 | 8.8 | 6.1 |
| Price/Sales | 1.2 | 1.2 | 1.2 | 1.3 | 1.2 | 1.2 | 1.5 | 1.7 | 1.7 | 1.9 | 2.8 | 3.7 | 2.9 |
| FCF Yield | 12.7% | 15.5% | 12.6% | 13.3% | 15.6% | 13.5% | 18.0% | 10.5% | 8.0% | 9.0% | 6.1% | 4.2% | 6.4% |
| Market Cap | 103.3B | 88.0B | 107.6B | 101.2B | 76.0B | 92.8B | 86.6B | 101.9B | 113.6B | 141.2B | 202.3B | 287.7B | 201.3B |
| Avg. Price | 108.60 | 95.12 | 95.37 | 103.70 | 98.60 | 98.25 | 93.68 | 106.77 | 116.30 | 127.23 | 184.75 | 261.00 | 214.19 |
| Year-End Price | 97.74 | 85.55 | 107.26 | 103.27 | 79.21 | 99.34 | 96.47 | 112.62 | 124.79 | 153.18 | 215.94 | 303.36 | 214.19 |
INTERNATIONAL BUSINESS MACHINES CORP passes 5 of 9 quality checks, suggesting mixed fundamentals.
INTERNATIONAL BUSINESS MACHINES CORP trades at 19.2x trailing earnings, compared to its 15-year median P/E of 17.7x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 16.6x vs a median of 8.5x. The company's 5-year average ROIC is 9.9% with a gross margin of 55.8%. Total shareholder yield (dividends) is 3.1%. At current prices, the estimated annualized return to fair value is -1.4%.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) reported annual revenue of $67.5 billion in its most recent fiscal year, based on SEC EDGAR filings.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a net profit margin of 15.7%. This is a healthy margin.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) generated $12.1 billion in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a debt-to-equity ratio of 2.18. This indicates higher leverage, which may increase financial risk.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) reported earnings per share (EPS) of $11.17 in its most recent fiscal year.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a return on equity (ROE) of 35.3%. This indicates the company generates strong returns for shareholders.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a 5-year average gross margin of 55.8%. This high margin suggests strong pricing power and a potential competitive moat.
The Ledger Terminal provides 19 years of financial data for INTERNATIONAL BUSINESS MACHINES CORP (IBM), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
INTERNATIONAL BUSINESS MACHINES CORP (IBM) has a book value per share of $34.43, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects software to grow 10%+ in 2026, driven by accelerating organic growth, strong recurring revenue momentum, and generative AI traction across the portfolio, with consulting expected to grow at low to mid-single digits supported by a $32 billion backlog with over 25% GenAI penetration. Infrastructure revenue is expected to decline low single digits as Z17 product cycle dynamics balance early-year strength, though the company views this as its strongest Z cycle given AI innovation value delivered to clients. The company expects to expand operating pre-tax margins by approximately 1 point in 2026 through portfolio mix, ongoing productivity initiatives, and revenue scale, while absorbing approximately $600 million of dilution from the Confluent acquisition and realizing an incremental $1 billion of productivity savings to reach $5.5 billion in annual run-rate savings by year-end 2026. Free cash flow is expected to grow approximately $1 billion year-over-year, driven primarily by adjusted EBITDA growth, with headwinds from higher cash taxes, increased capital expenditures, and higher net interest expense.
Based on recent SEC filings and earnings calls, INTERNATIONAL BUSINESS MACHINES CORP (IBM) has provided the following forward guidance: Revenue growth (constant currency): 5%+ (FY2026); Free cash flow growth: approximately $1 billion year-over-year (FY2026); Software revenue growth: 10%+ (FY2026); Consulting revenue growth: low to mid-single digits (FY2026); Infrastructure revenue growth: down low single digits (FY2026), plus 3 additional metrics.
Software revenue growth (FY2026): “Our revenue expectations are underpinned by our accelerating software business, which we now expect to grow 10%+ this year.”
Consulting revenue growth (FY2026): “In consulting, the quality of our backlog and momentum in gen AI with backlog penetration at about 30% continue to support an acceleration in revenue growth to low to mid-single digits for the year.”
Infrastructure revenue growth (FY2026): “We are off to a great start with Z17, and four quarters into Z17's launch, we prudently continue to expect infrastructure revenue to be down low single digits for the year, representing about a half a point impact to IBM.”
Operating pre-tax margin expansion (FY2026): “actions we are taking to accelerate our cost synergies enable us to stay on track to expand operating pre-tax margins by about a point this year.”
Confluent dilution (FY2026): “Last quarter, we disclosed that we anticipated absorbing about $600 million of dilution from Confluent in 2026, driven largely by stock-based compensation and interest expense.”
Productivity savings (incremental) (FY2026): “we continue to accelerate our productivity initiatives and now expect an incremental $1 billion of productivity savings this year, driving $5.5 billion of annual run rate savings by the end of 2026.”
No recent press releases.