IBM (IBM)
Information Technology · $218B market cap · SEC CIK 0000051143
fundamentals score out of 100
Next reports on Oct 21, 2026, after the close, with analysts expecting $2.90 in earnings per share.
The case for IBM
- Earns 34% back on shareholder equity.
- Generated $12.1B of free cash flow in FY2025, 18% of revenue.
- Earnings per share up 82.7%.
- Pays a 4.3% dividend while you wait.
- A PEG of 0.25: a P/E of 20.3× is low for EPS growing 83%.
- Gross margin of 58% absorbs cost shocks.
The case against
- Current liabilities exceed current assets (ratio 0.79).
- The price trend is weak (30/100): -12.9% over a year, -6.9% over three months, 24% of the way up its 52-week range.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 68 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 45 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 58 |
| Momentumhow the price has behaved lately | 30 |
| Stabilityhow violently it moves, what it owes and what it pays you | 73 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
Key numbers
| Price / earnings | 20.3× |
|---|---|
| Price / book | 7.67× |
| Price / sales | 3.1× |
| Revenue growth (YoY) | +7.9% |
| EPS growth (YoY) | +82.7% |
| Gross margin | 58% |
| Operating margin | 15% |
| Net margin | 16% |
| Return on equity | 34% |
| Debt / equity | 1.80× |
| Current ratio | 0.79 |
| Dividend yield | 4.28% |
| Beta | 0.79 |
| 52-week range | $199.19 – $332.46 |
| Position in that range | 24% of the way up |
| 3-month return | -6.9% |
| 1-year return | -12.9% |
Five years of financials, as filed
Pulled from IBM's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $67.5B | $62.8B | $61.9B | $60.5B | $57.4B |
| Gross profit | $39.3B | $35.6B | $34.3B | $32.7B | $31.5B |
| Net income | $10.6B | $6.0B | $7.5B | $1.6B | $5.7B |
| Operating cash flow | $13.2B | $13.4B | $13.9B | $10.4B | $12.8B |
| Capital expenditure | $1.1B | $1.0B | $1.2B | $1.3B | $2.1B |
| Total assets | $152B | $137B | $135B | $127B | $132B |
| Total liabilities | $119B | $110B | $113B | $105B | $113B |
| Shareholder equity | $32.6B | $27.3B | $22.5B | $21.9B | $18.9B |
| Cash | $13.6B | $13.9B | $13.1B | $7.9B | $6.7B |
| Long-term debt | $54.8B | $49.9B | $50.1B | $46.2B | $44.9B |
| Free cash flow | $12.1B | $12.4B | $12.7B | $9.1B | $10.7B |
| Gross margin | 58.2% | 56.7% | 55.4% | 54.0% | 54.9% |
| Net margin | 15.7% | 9.6% | 12.1% | 2.7% | 10.0% |
| Diluted shares | 949M | 937M | 922M | 912M | 905M |
Share count is up 4.9% over 4 years. Mild issuance.
What IBM says it does
International Business Machines Corporation (IBM or the company) was incorporated in the State of New York on June 16, 1911, as the Computing-Tabulating-Recording Co. (C-T-R), a consolidation of the Computing Scale Co. of America, the Tabulating Machine Co. and The International Time Recording Co. of New York. Since that time, IBM has focused on the intersection of business insight and technological innovation, and its operations and aims have been international in nature. This was signaled over 100 years ago, in 1924, when C-T-R changed its name to International Business Machines Corporation. And it continues today—we create sustained value for clients by helping them leverage the power of hybrid cloud and artificial intelligence (AI). Our hybrid cloud platform and AI technology support clients’ digital transformations and helps them reimagine critical workflows, at scale, and modernize applications to increase agility, drive…
Risk factors IBM lists in its 10-K
- Downturn in Economic Environment and Client Spending Budgets Could Impact the Company’s Business
- Failure of Innovation Initiatives Could Impact the Long-Term Success of the Company
- Damage to IBM’s Reputation Could Impact the Company’s Business
- Risks from Investing in Growth Opportunities Could Impact the Company’s Business
- IBM’s Intellectual Property Portfolio May Not Prevent Competitive Offerings, and IBM May Not Be Able to Obtain Necessary Licenses
- Risks to the Company from Acquisitions, Alliances and Divestitures Include Integration Challenges, Failure to Achieve Objectives, the Assumption or Retention of Liabilities and Higher Debt Levels
- The Company’s Financial Results for Particular Periods Are Difficult to Predict
- Due to the Company’s Global Presence, Its Business and Operations Could Be Impacted by Local Legal, Economic, Political, Health and Other Conditions
- The Company May Not Meet Its Growth and Productivity Objectives
- Ineffective Internal Controls Could Impact the Company’s Business and Operating Results
- The Company’s Use of Accounting Estimates Involves Judgment and Could Impact the Company’s Financial Results
- The Company’s Goodwill or Amortizable Intangible Assets May Become Impaired
- The Company Depends on Skilled Employees and Could Be Impacted by a Shortage of Critical Skills
- The Company’s Business Could Be Impacted by Its Relationships with Critical Suppliers