| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 2/6 |
| Past Performance | 0/6 |
| Financial Health | 3/6 |
| Dividends | 5/6 |
IBM Overview
International Business Machines Corporation provides integrated solutions and services worldwide.
International Business Machines Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$132.97 |
| 52 Week High | US$105.92 |
| 52 Week Low | US$152.84 |
| Beta | 1.21 |
| 1 Month Change | -4.41% |
| 3 Month Change | -8.05% |
| 1 Year Change | 10.34% |
| 3 Year Change | -10.70% |
| 5 Year Change | -15.18% |
| Change since IPO | 442.73% |
Recent News & Updates
IBM's (NYSE:IBM) Underwhelming Returns have Potentially Bottomed
“Nobody ever got fired for buying IBM“ – this old Wall Street Proverb has likely been challenged in recent times, as International Business Machines Corporation (NYSE: IBM) struggled to keep pace with the broad market. In this article, we will reflect on and look at the company's actions to stop and potentially reverse this trend.
IBM Vs. Microsoft Stock: Which Is The Better Buy?
IBM and Microsoft are active in cloud computing, but do own many more business franchises on top of that. There are vast differences when it comes to growth, fundamentals, balance sheet strength, and valuation. MSFT is the quality pick and suitable for a sleep-well-at-night portfolio, while IBM is a potentially rewarding turnaround play.
Shareholder Returns
| IBM | US IT | US Market | |
|---|---|---|---|
| 7D | -2.4% | -1.8% | -1.8% |
| 1Y | 10.3% | 22.3% | 31.5% |
Return vs Industry: IBM underperformed the US IT industry which returned 24.7% over the past year.
Return vs Market: IBM underperformed the US Market which returned 33% over the past year.
Price Volatility
| IBM volatility | |
|---|---|
| IBM Beta | 1.21 |
| Industry Beta | 1.18 |
| Market Beta | 1 |
Stable Share Price: IBM is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: IBM's weekly volatility (2%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1911 | 345,900 | Arvind Krishna | https://www.ibm.com |
International Business Machines Corporation provides integrated solutions and services worldwide. Its Cloud & Cognitive Software segment offers software for vertical and domain-specific solutions in various application areas; and customer information control system and storage, and analytics and integration software solutions to support client mission on-premise workloads in banking, airline, and retail industries. It also offers middleware and data platform software, including Red Hat that enables the operation of clients’ hybrid multi-cloud environments; and Cloud Paks, WebSphere distributed, and analytics platform software, such as DB2 distributed, information integration, and enterprise content management, as well as IoT, Blockchain and AI/Watson platforms.
International Business Machines Fundamentals Summary
| IBM fundamental statistics | |
|---|---|
| Market Cap | US$119.18b |
| Earnings (TTM) | US$5.24b |
| Revenue (TTM) | US$74.40b |
22.7x
P/E Ratio1.6x
P/S RatioIs IBM overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| IBM income statement (TTM) | |
|---|---|
| Revenue | US$74.40b |
| Cost of Revenue | US$37.48b |
| Gross Profit | US$36.22b |
| Expenses | US$30.98b |
| Earnings | US$5.24b |
Last Reported Earnings
Jun 30, 2021
Next Earnings Date
Oct 20, 2021
| Earnings per share (EPS) | 5.87 |
| Gross Margin | 48.68% |
| Net Profit Margin | 7.05% |
| Debt/Equity Ratio | 248.5% |
How did IBM perform over the long term?
See historical performance and comparisonDividends
4.9%
Current Dividend Yield111%
Payout RatioValuation
Is International Business Machines undervalued compared to its fair value and its price relative to the market?
31.8%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: IBM ($132.97) is trading below our estimate of fair value ($194.87)
Significantly Below Fair Value: IBM is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: IBM is good value based on its PE Ratio (22.7x) compared to the US IT industry average (34.1x).
PE vs Market: IBM is poor value based on its PE Ratio (22.7x) compared to the US market (17.5x).
Price to Earnings Growth Ratio
PEG Ratio: IBM is poor value based on its PEG Ratio (1.8x)
Price to Book Ratio
PB vs Industry: IBM is overvalued based on its PB Ratio (5.4x) compared to the US IT industry average (5.3x).
Future Growth
How is International Business Machines forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?
13.0%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: IBM's forecast earnings growth (13% per year) is above the savings rate (2%).
Earnings vs Market: IBM's earnings (13% per year) are forecast to grow slower than the US market (14.9% per year).
High Growth Earnings: IBM's earnings are forecast to grow, but not significantly.
Revenue vs Market: IBM's revenue (1.8% per year) is forecast to grow slower than the US market (9.8% per year).
High Growth Revenue: IBM's revenue (1.8% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: IBM's Return on Equity is forecast to be very high in 3 years time (42.1%).
Past Performance
How has International Business Machines performed over the past 5 years?
-12.7%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: IBM has a large one-off loss of $1.9B impacting its June 30 2021 financial results.
Growing Profit Margin: IBM's current net profit margins (7%) are lower than last year (10.4%).
Past Earnings Growth Analysis
Earnings Trend: IBM's earnings have declined by 12.7% per year over the past 5 years.
Accelerating Growth: IBM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: IBM had negative earnings growth (-33.5%) over the past year, making it difficult to compare to the IT industry average (28%).
Return on Equity
High ROE: Whilst IBM's Return on Equity (23.76%) is high, this metric is skewed due to their high level of debt.
Financial Health
How is International Business Machines's financial position?
Financial Position Analysis
Short Term Liabilities: IBM's short term assets ($30.8B) do not cover its short term liabilities ($36.6B).
Long Term Liabilities: IBM's short term assets ($30.8B) do not cover its long term liabilities ($88.1B).
Debt to Equity History and Analysis
Debt Level: IBM's debt to equity ratio (248.5%) is considered high.
Reducing Debt: IBM's debt to equity ratio has reduced from 279.8% to 248.5% over the past 5 years.
Debt Coverage: IBM's debt is well covered by operating cash flow (32.3%).
Interest Coverage: IBM's interest payments on its debt are well covered by EBIT (8.1x coverage).
Balance Sheet
Dividend
What is International Business Machines's current dividend yield, its reliability and sustainability?
4.93%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: IBM's dividend (4.93%) is higher than the bottom 25% of dividend payers in the US market (1.35%).
High Dividend: IBM's dividend (4.93%) is in the top 25% of dividend payers in the US market (3.65%)
Stability and Growth of Payments
Stable Dividend: IBM's dividends per share have been stable in the past 10 years.
Growing Dividend: IBM's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its high payout ratio (111.2%), IBM's dividend payments are not well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: IBM's dividends in 3 years are forecast to be covered by earnings (57% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.2yrs
Average management tenure
CEO
Arvind Krishna (58 yo)
1.42yrs
Tenure
US$17,009,682
Compensation
Mr. Arvind Krishna serves as Chairman of the Board at International Business Machines Corporation since January 1, 2021. He has been Chief Executive Officer and Director of at International Business Machin...
CEO Compensation Analysis
Compensation vs Market: Arvind's total compensation ($USD17.01M) is above average for companies of similar size in the US market ($USD11.33M).
Compensation vs Earnings: Insufficient data to compare Arvind's compensation with company performance.
Leadership Team
Experienced Management: IBM's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.
Board Members
Experienced Board: IBM's board of directors are considered experienced (7 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
International Business Machines Corporation's employee growth, exchange listings and data sources
Key Information
- Name: International Business Machines Corporation
- Ticker: IBM
- Exchange: NYSE
- Founded: 1911
- Industry: IT Consulting and Other Services
- Sector: Software
- Market Cap: US$119.184b
- Shares outstanding: 896.32m
- Website: https://www.ibm.com
Number of Employees
Location
- International Business Machines Corporation
- One New Orchard Road
- Armonk
- New York
- 10504
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/09/22 00:10 |
| End of Day Share Price | 2021/09/21 00:00 |
| Earnings | 2021/06/30 |
| Annual Earnings | 2020/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.