International Business Machines Corporation

NYSE:IBM Stock Report

Market Cap: US$189.5b

International Business Machines Valuation

Is IBM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of IBM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IBM ($208.09) is trading below our estimate of fair value ($308.81)

Significantly Below Fair Value: IBM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IBM?

Key metric: As IBM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for IBM. This is calculated by dividing IBM's market cap by their current earnings.
What is IBM's PE Ratio?
PE Ratio30.2x
EarningsUS$6.37b
Market CapUS$189.54b

Price to Earnings Ratio vs Peers

How does IBM's PE Ratio compare to its peers?

The above table shows the PE ratio for IBM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average28.6x
ACN Accenture
30.3x9.5%US$220.9b
IT Gartner
37.8x0.5%US$40.3b
CTSH Cognizant Technology Solutions
16.9x9.4%US$38.2b
EPAM EPAM Systems
29.5x10.3%US$13.3b
IBM International Business Machines
30.2x10.5%US$189.5b

Price-To-Earnings vs Peers: IBM is expensive based on its Price-To-Earnings Ratio (30.2x) compared to the peer average (28.6x).

Price to Earnings Ratio vs Industry

How does IBM's PE Ratio compare vs other companies in the US IT Industry?

5 CompaniesPrice / EarningsEstimated GrowthMarket Cap
TAOP Taoping
1.1xn/aUS$2.39m
GTCH GBT Technologies
0.1xn/aUS$1.68m
DLTI DLT Resolution
0.3xn/aUS$228.03k
TMNA Agri-Fintech Holdings
0.0004xn/aUS$129.25k
IBM 30.2xIndustry Avg. 42.4xNo. of Companies5PE020406080100+
5 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: IBM is good value based on its Price-To-Earnings Ratio (30.2x) compared to the US IT industry average (42.4x).

Price to Earnings Ratio vs Fair Ratio

What is IBM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IBM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio30.2x
Fair PE Ratio49.7x

Price-To-Earnings vs Fair Ratio: IBM is good value based on its Price-To-Earnings Ratio (30.2x) compared to the estimated Fair Price-To-Earnings Ratio (49.7x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst IBM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$208.09
US$214.21
+2.9%
18.3%US$260.00US$139.00n/a18
Nov ’25US$208.25
US$214.21
+2.9%
18.3%US$260.00US$139.00n/a18
Oct ’25US$219.35
US$196.74
-10.3%
15.1%US$250.00US$139.00n/a18
Sep ’25US$202.13
US$188.49
-6.7%
13.7%US$222.00US$130.00n/a19
Aug ’25US$189.66
US$186.39
-1.7%
14.2%US$222.00US$130.00n/a19
Jul ’25US$175.10
US$179.83
+2.7%
13.4%US$215.00US$130.00n/a19
Jun ’25US$166.85
US$180.23
+8.0%
13.9%US$215.00US$130.00n/a18
May ’25US$164.43
US$183.29
+11.5%
12.9%US$215.00US$130.00n/a18
Apr ’25US$189.83
US$185.93
-2.1%
15.6%US$224.00US$125.00n/a18
Mar ’25US$188.20
US$180.93
-3.9%
15.2%US$224.00US$125.00n/a19
Feb ’25US$186.90
US$178.51
-4.5%
16.3%US$224.00US$125.00n/a19
Jan ’25US$163.55
US$151.59
-7.3%
14.9%US$210.00US$110.00n/a17
Dec ’24US$160.55
US$146.50
-8.8%
11.2%US$179.00US$110.00n/a16
Nov ’24US$145.40
US$146.13
+0.5%
11.3%US$179.00US$110.00US$208.2516
Oct ’24US$140.30
US$146.88
+4.7%
12.0%US$188.00US$110.00US$219.3516
Sep ’24US$147.94
US$144.47
-2.3%
10.3%US$175.00US$110.00US$202.1315
Aug ’24US$143.33
US$144.63
+0.9%
10.0%US$175.00US$110.00US$189.6616
Jul ’24US$133.81
US$139.35
+4.1%
8.4%US$162.00US$110.00US$175.1014
Jun ’24US$129.82
US$138.78
+6.9%
8.3%US$162.00US$110.00US$166.8514
May ’24US$126.09
US$139.50
+10.6%
8.3%US$162.00US$110.00US$164.4314
Apr ’24US$131.09
US$144.27
+10.1%
9.0%US$165.00US$110.00US$189.8315
Mar ’24US$128.19
US$144.67
+12.9%
8.9%US$165.00US$110.00US$188.2015
Feb ’24US$135.09
US$144.67
+7.1%
8.9%US$165.00US$110.00US$186.9015
Jan ’24US$140.89
US$141.02
+0.09%
9.2%US$165.00US$111.00US$163.5515
Dec ’23US$149.16
US$140.35
-5.9%
8.5%US$160.00US$111.00US$160.5515
Nov ’23US$138.20
US$140.35
+1.6%
8.5%US$160.00US$111.00US$145.4015

Analyst Forecast: Target price is less than 20% higher than the current share price.

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