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IBM

International Business MachinesNYSE:IBM Stock Report

Market Cap

US$123.2b

7D

1.7%

1Y

15.6%

Updated

26 Sep, 2021

Data

Company Financials +
IBM fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance0/6
Financial Health3/6
Dividends5/6

IBM Overview

International Business Machines Corporation provides integrated solutions and services worldwide.

International Business Machines Competitors

Price History & Performance

Summary of all time highs, changes and price drops for International Business Machines
Historical stock prices
Current Share PriceUS$137.49
52 Week HighUS$105.92
52 Week LowUS$152.84
Beta1.21
1 Month Change-1.38%
3 Month Change-5.37%
1 Year Change15.59%
3 Year Change-9.07%
5 Year Change-13.45%
Change since IPO461.18%

Recent News & Updates

Sep 16
IBM's (NYSE:IBM) Underwhelming Returns have Potentially Bottomed

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.

Sep 01

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

IBMUS ITUS Market
7D1.7%1.4%0.1%
1Y15.6%27.9%35.3%

Return vs Industry: IBM underperformed the US IT industry which returned 27.9% over the past year.

Return vs Market: IBM underperformed the US Market which returned 35.3% over the past year.

Price Volatility

Is IBM's price volatile compared to industry and market?
IBM volatility
IBM Beta1.21
Industry Beta1.18
Market Beta1

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

FoundedEmployeesCEOWebsite
1911345,900Arvind Krishnahttps://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

How do International Business Machines's earnings and revenue compare to its market cap?
IBM fundamental statistics
Market CapUS$123.24b
Earnings (TTM)US$5.24b
Revenue (TTM)US$74.40b

23.5x

P/E Ratio

1.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
IBM income statement (TTM)
RevenueUS$74.40b
Cost of RevenueUS$37.48b
Gross ProfitUS$36.22b
ExpensesUS$30.98b
EarningsUS$5.24b

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Oct 20, 2021

Earnings per share (EPS)5.85
Gross Margin48.68%
Net Profit Margin7.05%
Debt/Equity Ratio248.5%

How did IBM perform over the long term?

See historical performance and comparison

Dividends

4.8%

Current Dividend Yield

111%

Payout Ratio

Valuation

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

30.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IBM ($137.49) is trading below our estimate of fair value ($196.27)

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 (23.5x) compared to the US IT industry average (34.9x).

PE vs Market: IBM is poor value based on its PE Ratio (23.5x) compared to the US market (17.9x).


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 (5.6x) compared to the US IT industry average (5.2x).


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 (15% 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?

4.77%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: IBM's dividend (4.77%) is higher than the bottom 25% of dividend payers in the US market (1.33%).

High Dividend: IBM's dividend (4.77%) is in the top 25% of dividend payers in the US market (3.6%)


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 (58.5% 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 ($USD17.01M) is above average for companies of similar size in the US market ($USD11.36M).

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$123.235b
  • 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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/26 22:11
End of Day Share Price2021/09/24 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.