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IBM

International Business Machines NYSE:IBM Stock Report

Last Price

US$132.61

Market Cap

US$119.8b

7D

0.4%

1Y

-6.1%

Updated

08 Aug, 2022

Data

Company Financials +
IBM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance4/6
Financial Health1/6
Dividends5/6

IBM Stock Overview

International Business Machines Corporation provides integrated solutions and services worldwide.

International Business Machines Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for International Business Machines
Historical stock prices
Current Share PriceUS$132.61
52 Week HighUS$146.00
52 Week LowUS$114.56
Beta0.85
1 Month Change-5.60%
3 Month Change2.70%
1 Year Change-6.12%
3 Year Change-1.13%
5 Year Change-6.82%
Change since IPO441.27%

Recent News & Updates

Jul 25

IBM: Recent Earnings Are Not A Sign Of Fundamental Change

The recent rally in IBM share price seems to be largely influenced by market-wide forces. We also take a closer look at IBM's most recently reported quarterly numbers. From business fundamentals and strategy point of view, little seems to have changed at IBM. In the past few months International Business Machines (IBM) has turned into one of the best performing tech names. Since I first covered the company in January of 2021 IBM returned 17%, compared to merely 8% for the broader equity market. Data by YCharts During this timeframe the spin-off of Kyndryl (KD) was completed and now that the underperforming assets have been unloaded, expectations around the 'New IBM' are running high. Unfortunately, however, the strong share price performance since November of last year has little to do with IBM's fundamentals. As we see in the graph below, the iShares Edge MSCI USA Momentum Factor ETF (MTUM) peaked also in November of last year and since then the gap with the iShares Edge MSCI USA Value Factor ETF (VLUE) has been expanding. Data by YCharts As expectations of monetary tightening begun to surface and inflationary pressures intensified, high duration and momentum stocks begun to underperform the lower duration value companies. I talked about this dynamic in my recent analysis called 'The Cloud Space In Numbers: What Matters The Most', where I showed why the high-growth names were at risk. More specifically, I distinguished between the companies in the bottom left-hand corner and those in the upper right-hand corner in the graph below. prepared by the author, using data from Seeking Alpha As we see in the graph below, the high flyers, such as Workday (WDAY), Salesforce (CRM) and Adobe (ADBE), have become the worst performers, while companies like IBM and Oracle (ORCL) that were usually associated with low expected growth and low valuation multiples became the new stars. Data by YCharts Although this was good news for value investors as a whole and is a trend that could easily continue, we should distinguish between strong business performance and market-wide forces. Having said that, IBM shareholders should not simply assume that the strong share price performance is a sign of strong execution. Needless to say, the Kyndryl disastrous performance of losing 75% of its value in a matter of months also lies on the shoulders of current management of IBM. Data by YCharts A Closer Look At IBM's Recent Earnings IBM's recently reported quarterly numbers once again disappointed and the management seems to have largely attributed the U.S. dollar movement to the slightly lower guidance. IBM Earnings Release Alongside the guidance gross margins also fell across the board, with the exception of the Financing division, which is relatively small to the other business units. IBM Q2 2022 Earnings Release Rising labour and component costs were also to blame during the quarter and the management is addressing these through pricing actions which should take some time. Although this is likely true, IBM is also reducing spend on research and development and selling, general and administrative functions. Such actions are usually taken as a precaution during downturns, however, consistent lower spend in those areas could often have grave consequences. prepared by the author, using data from annual and quarterly reports Last but not least, the reported EPS numbers from continuing operations should also be adjusted as I have outlined before. IBM Q2 2022 Earnings Release I usually exclude the royalty income and all income/expenses grouped in the 'other' category. These expenses/income usually have little to do with IBM's ongoing business and as such I deem them to be irrelevant for long-term shareholders. IBM Annual Report 2021 IBM Annual Report 2021 On an adjusted basis, EPS increased from $1.08 in Q2 2021 to $1.33 in Q2 2022, which although is a notable increase remains low. Just as a back of the envelope calculation, if we annualize the last quarterly result, we end up with a total EPS number of $5.3 or a forward P/E ratio of almost 25x. Given all the difficulties facing IBM and its growth profile, this still appears as too high. Has Anything Changed Following The Recent Earnings? As expected, IBM continued on its strategy to fuel its growth through a frenzy of acquisitions and divestitures. Following the Kyndryl spin-off, the company completed four deals in a matter of just few months. Seeking Alpha Seeking Alpha Seeking Alpha Seeking Alpha As I have said before, all that does not bode well for the prospects of IBM's legacy businesses. Moreover, the management does not seem to be focused on organic growth numbers in their quarterly reviews which is even more worrisome. Now that the underperforming assets have been off-loaded, IBM's dividend payments are still too high relative to its adjusted income. prepared by the author, using data from annual and quarterly reports * adjusted for Intellectual property and custom development income, Other (income) and expense and Income/(loss) from discontinued operations, net of tax

Jul 20
Should You Investigate International Business Machines Corporation (NYSE:IBM) At US$131?

Should You Investigate International Business Machines Corporation (NYSE:IBM) At US$131?

International Business Machines Corporation ( NYSE:IBM ) saw significant share price movement during recent months on...

Shareholder Returns

IBMUS ITUS Market
7D0.4%3.6%1.0%
1Y-6.1%-28.1%-12.9%

Return vs Industry: IBM exceeded the US IT industry which returned -28.1% over the past year.

Return vs Market: IBM exceeded the US Market which returned -12.9% over the past year.

Price Volatility

Is IBM's price volatile compared to industry and market?
IBM volatility
IBM Average Weekly Movement3.5%
IT Industry Average Movement10.0%
Market Average Movement7.9%
10% most volatile stocks in US Market17.2%
10% least volatile stocks in US Market3.2%

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

Volatility Over Time: IBM's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1911282,100Arvind Krishnahttps://www.ibm.com

International Business Machines Corporation provides integrated solutions and services worldwide. The company operates through four business segments: Software, Consulting, Infrastructure, and Financing. The Software segment offers hybrid cloud platform and software solutions, such as Red Hat, an enterprise open-source solutions; software for business automation, AIOps and management, integration, and application servers; data and artificial intelligence solutions; and security software and services for threat, data, and identity.

International Business Machines Corporation Fundamentals Summary

How do International Business Machines's earnings and revenue compare to its market cap?
IBM fundamental statistics
Market CapUS$119.77b
Earnings (TTM)US$5.63b
Revenue (TTM)US$59.68b

21.3x

P/E Ratio

2.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
IBM income statement (TTM)
RevenueUS$59.68b
Cost of RevenueUS$27.00b
Gross ProfitUS$32.23b
Other ExpensesUS$26.61b
EarningsUS$5.63b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 18, 2022

Earnings per share (EPS)6.23
Gross Margin54.01%
Net Profit Margin9.43%
Debt/Equity Ratio257.8%

How did IBM perform over the long term?

See historical performance and comparison

Dividends

5.0%

Current Dividend Yield

105%

Payout Ratio

Does IBM pay a reliable dividends?

See IBM dividend history and benchmarks
When do you need to buy IBM by to receive an upcoming dividend?
International Business Machines dividend dates
Ex Dividend DateAug 09 2022
Dividend Pay DateSep 10 2022
Days until Ex dividend0 days
Days until Dividend pay date32 days

Does IBM pay a reliable dividends?

See IBM dividend history and benchmarks