NYSE:IBM

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

International Business Machines

Executive Summary

International Business Machines Corporation operates as an integrated solutions and services company worldwide. More Details


Snowflake Analysis

6 star dividend payer and fair value.


Similar Companies

Share Price & News

How has International Business Machines's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IBM is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: IBM's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-0.5%

IBM

0.1%

US IT

0.9%

US Market


1 Year Return

-6.3%

IBM

29.4%

US IT

22.1%

US Market

Return vs Industry: IBM underperformed the US IT industry which returned 30.1% over the past year.

Return vs Market: IBM underperformed the US Market which returned 22.2% over the past year.


Shareholder returns

IBMIndustryMarket
7 Day-0.5%0.1%0.9%
30 Day8.3%13.6%10.2%
90 Day1.1%8.2%9.7%
1 Year-1.4%-6.3%30.8%29.4%24.8%22.1%
3 Year-7.2%-19.5%99.0%91.3%48.6%38.7%
5 Year12.3%-9.6%180.0%160.6%99.6%77.6%

Long-Term Price Volatility Vs. Market

How volatile is International Business Machines's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is International Business Machines undervalued compared to its fair value and its price relative to the market?

13.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IBM ($123.61) is trading below our estimate of fair value ($142.78)

Significantly Below Fair Value: IBM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: IBM is good value based on its PE Ratio (13.9x) compared to the US IT industry average (35.8x).

PE vs Market: IBM is good value based on its PE Ratio (13.9x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: IBM is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: IBM is overvalued based on its PB Ratio (5.2x) compared to the US IT industry average (4x).


Next Steps

Future Growth

How is International Business Machines forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

9.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IBM's forecast earnings growth (9% per year) is above the savings rate (2.2%).

Earnings vs Market: IBM's earnings (9% per year) are forecast to grow slower than the US market (21.9% per year).

High Growth Earnings: IBM's earnings are forecast to grow, but not significantly.

Revenue vs Market: IBM's revenue (1.7% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: IBM's revenue (1.7% 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 (45.2%).


Next Steps

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 high quality earnings.

Growing Profit Margin: IBM's current net profit margins (10.5%) are higher than last year (10%).


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 earnings growth over the past year (2.2%) exceeds its 5-year average (-12.7% per year).

Earnings vs Industry: IBM earnings growth over the past year (2.2%) underperformed the IT industry 3.2%.


Return on Equity

High ROE: Whilst IBM's Return on Equity (37.05%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is International Business Machines's financial position?


Financial Position Analysis

Short Term Liabilities: IBM's short term assets ($39.8B) exceed its short term liabilities ($38.0B).

Long Term Liabilities: IBM's short term assets ($39.8B) do not cover its long term liabilities ($94.8B).


Debt to Equity History and Analysis

Debt Level: IBM's debt to equity ratio (305.3%) is considered high.

Reducing Debt: IBM's debt to equity ratio has increased from 294.4% to 305.3% over the past 5 years.

Debt Coverage: IBM's debt is well covered by operating cash flow (24.2%).

Interest Coverage: IBM's interest payments on its debt are well covered by EBIT (7.6x coverage).


Balance Sheet


Next Steps

Dividend

What is International Business Machines's current dividend yield, its reliability and sustainability?

5.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: IBM's dividend (5.27%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: IBM's dividend (5.27%) is in the top 25% of dividend payers in the US market (4.11%)


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 reasonable payout ratio (73.1%), IBM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IBM's dividends in 3 years are forecast to be covered by earnings (54.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Arvind Krishna (57 yo)

0.67

Tenure

Mr. Arvind Krishna has been Chief Executive Officer and Director of at International Business Machines Corporation since April 6, 2020. Mr. Krishna served as the Senior Vice President of Cloud and Cognitiv...


Leadership Team

NamePositionTenureCompensationOwnership
Virginia Rometty
Executive Chairman8.17yrsUS$20.16m0.038%
$ 41.4m
James Kavanaugh
CFO and Senior VP of Finance & Operations2.92yrsUS$7.14m0.0087%
$ 9.6m
Michelle Browdy
Senior VP of Legal & Regulatory Affairs and General Counsel5.92yrsUS$5.59m0.0077%
$ 8.5m
John Kelly
Executive Vice President20.92yrsUS$7.72m0.015%
$ 16.7m
Arvind Krishna
CEO & Director0.67yrno data0.0087%
$ 9.6m
James Whitehurst
President0.67yrno datano data
Fletcher Previn
Chief Information Officerno datano datano data
Patricia Murphy
Vice President of Investor Relationsno datano datano data
Kevin Reardon
Vice President of Corporate Developmentno datano datano data
Michelle Peluso
Senior VP of Digital Sales & Chief Marketing Officerno datano datano data
Nickle LaMoreaux
Senior VP & Chief Human Resources Officer0.25yrno datano data
Bernard Meyerson
Chief Innovation Officer & VP11.08yrsno datano data

1.8yrs

Average Tenure

55yo

Average Age

Experienced Management: IBM's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Virginia Rometty
Executive Chairman8.17yrsUS$20.16m0.038%
$ 41.4m
Arvind Krishna
CEO & Director0.67yrno data0.0087%
$ 9.6m
Thomas Rosamilia
Senior VP of IBM Systems & Chairman of North America1.83yrsno datano data
Martin Jetter
Senior VP & Chairman of IBM Europe1.92yrsUS$8.51mno data
Michael Eskew
Independent Lead Directorno dataUS$598.38k0.00067%
$ 738.0k
David Farr
Independent Director8.92yrsUS$391.53k0.00084%
$ 925.2k
Sidney Taurel
Independent Director19.92yrsUS$566.54k0.0032%
$ 3.6m
Frederick Waddell
Independent Director3.17yrsUS$353.76k0.00042%
$ 462.6k
Andrew Liveris
Independent Director10.83yrsUS$443.94k0.00030%
$ 330.4k
Alex Gorsky
Independent Director6.25yrsUS$412.72k0.00047%
$ 517.7k
Liming Chen
Chairman of Greater China Groupno datano datano data
Michael Barr
Member of Watson Healthcare Advisory Boardno datano datano data

6.3yrs

Average Tenure

61yo

Average Age

Experienced Board: IBM's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: IBM 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 company bio, 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$110.144b
  • Shares outstanding: 891.06m
  • Website: https://www.ibm.com

Number of Employees


Location

  • International Business Machines Corporation
  • One New Orchard Road
  • Armonk
  • New York
  • 10504
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IBMNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
IBMLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
IBMBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDJan 1968
IBM *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
IBMSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
IBMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
IBMWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
IBMXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
IBMSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
IBM-UETLX (Eurotlx)YesCommon StockITEURJan 1968
IBMAENXTBR (Euronext Brussels)YesCommon StockBEUSDJan 1968
IBM-RMMISX (Micex - Rts)YesCommon StockRURUBJan 1968
IBMBASE (Buenos Aires Stock Exchange)CEDEAR 5 REP 1 COM STK USD0.2ARARSJul 2001
IBMB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REPR 1 COM SHSBRBRLNov 2011

Biography

International Business Machines Corporation operates as an integrated solutions and services company worldwide. Its Cloud & Cognitive Software segment offers software for vertical and domain-specific solut...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/04 00:15
End of Day Share Price2020/12/03 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


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.