International Business Machines Corporation (IBM)
NYSE:IBM
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International Business Machines
(NYSE:IBM)
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Rating:72Outperform
Price Target:
$316.00
â–²(24.67% Upside)
Action:Upgraded
Date:06/02/26
The score is driven by strong profitability and free-cash-flow generation, supported by constructive earnings guidance and solid Q1 execution. It is tempered by elevated leverage on the balance sheet, a stretched technical setup (overbought momentum), and a relatively full valuation at ~26x earnings.
Positive Factors
Strong Free Cash Flow
Consistent, high free cash flow (TTM ~$13.1B; record Q1 FCF +13%) provides durable internal funding for R&D, capital spending, dividends, buybacks and targeted M&A. Reliable FCF supports strategic flexibility and resilience across economic cycles, enabling reinvestment without sole reliance on external financing.
Negative Factors
Elevated Leverage
High leverage (debt-to-equity ~2.06x) materially reduces financial flexibility. In a higher‑rate environment or economic slowdown, servicing and refinancing large debt loads can constrain capital allocation, limit opportunistic investments or shareholder returns, and increase vulnerability to margin or cash‑flow shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Free Cash Flow
Consistent, high free cash flow (TTM ~$13.1B; record Q1 FCF +13%) provides durable internal funding for R&D, capital spending, dividends, buybacks and targeted M&A. Reliable FCF supports strategic flexibility and resilience across economic cycles, enabling reinvestment without sole reliance on external financing.
Read all positive factors
International Business Machines Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down IBM’s sales across its various divisions, showcasing which segments are growing and contributing most to overall revenue.
Breaks down IBM’s sales across its various divisions, showcasing which segments are growing and contributing most to overall revenue.
Data provided by:
The Fly
The FlyInternational Business Machines (IBM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$267.72B
Dividend Yield2.21%
Average Volume (3M)10.20M
Price to Earnings (P/E)24.9
Beta (1Y)0.83
Revenue Growth9.67%
EPS Growth94.28%
CountryUS
Employees270,300
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)11.51
Shares Outstanding939,885,250
10 Day Avg. Volume16,439,449
30 Day Avg. Volume10,201,995
Financial Highlights & Ratios
PEG Ratio0.35
Price to Book (P/B)8.46
Price to Sales (P/S)4.09
P/FCF Ratio23.86
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue4.93
Enterprise Value/Gross Profit8.36
Enterprise Value/Ebitda20.81
Forecast
1Y Price Target
$300.13Price Target Upside18.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
EPS Forecast (FY)12.43
Revenue Forecast (FY)$71.47B
International Business Machines Business Overview & Revenue Model
Company Description
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 pl...
How the Company Makes Money
IBM primarily makes money by selling enterprise software subscriptions and support, billing for consulting and delivery services, and generating revenue from infrastructure-related offerings. A major revenue stream is Software, which includes subs...
International Business Machines Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Positive
The call portrays a predominantly positive operational and financial performance: broad-based revenue growth (6%), strong software and data momentum (software +8%, data +16%, ARR +10%), record first-quarter free cash flow (+13%), and margin expansion (operating pretax margin +140 bps). Strategic moves (Confluent close, Red Hat/OpenShift scale, IBM Z AI capabilities, IBM Bob GA, quantum progress) reinforce the software-led, hybrid cloud and AI narrative. Near-term negatives are manageable: consulting margin softness, an expected low-single-digit decline in infrastructure revenue for the year, Confluent-related dilution (~$600M) and macro/supply chain uncertainties that prompted conservative guidance posture. On balance, the positive metrics, clear AI-driven demand tailwinds, and reiterated 5%+ revenue and ~$1B free cash flow growth guidance outweigh the listed challenges.Positive Updates
Top-line Growth
Total revenue grew 6% in Q1 FY2026, driven by strong performance across software and infrastructure.
Negative Updates
Consulting Margin Pressure
Consulting segment profit margin declined modestly due to currency headwinds from geographic mix and reinvestment of productivity gains.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-line Growth
Total revenue grew 6% in Q1 FY2026, driven by strong performance across software and infrastructure.
Read all positive updates
Company Guidance
IBM maintained its 2026 guidance, saying it remains confident it can deliver constant‑currency revenue growth of 5%+ and grow free cash flow by about $1.0 billion year‑over‑year, while expecting software to accelerate to 10%+ growth for the year, consulting to accelerate to low‑ to mid‑single‑digit revenue growth, and infrastructure revenue to be down low‑single‑digits (about a 0.5‑point headwind to consolidated revenue). Management expects operating pretax margin expansion of roughly 1 percentage point for the year (with ~50 basis points of pretax margin expansion in Q2), an operating tax rate in the mid‑teens (Q2 also mid‑teens), and cautioned it will absorb roughly $600 million of dilution from the early Confluent close in 2026, but said cost‑synergy actions and productivity should keep them on track for the margin and free‑cash‑flow targets despite headwinds from higher cash taxes, higher CapEx and higher net interest expense.International Business Machines Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
55
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 68.91B | 67.53B | 62.75B | 61.86B | 60.53B | 57.35B |
| Gross Profit | 40.64B | 40.19B | 35.55B | 34.30B | 32.69B | 31.49B |
| EBITDA | 16.32B | 17.28B | 12.18B | 14.69B | 7.17B | 12.41B |
| Net Income | 10.75B | 10.59B | 6.02B | 7.50B | 1.64B | 5.74B |
Balance Sheet | ||||||
| Total Assets | 156.23B | 151.88B | 137.18B | 135.24B | 127.24B | 132.00B |
| Cash, Cash Equivalents and Short-Term Investments | 11.78B | 14.47B | 14.59B | 13.44B | 8.74B | 7.25B |
| Total Debt | 70.60B | 67.15B | 58.40B | 59.94B | 54.01B | 55.14B |
| Total Liabilities | 123.17B | 119.14B | 109.78B | 112.63B | 105.22B | 113.00B |
| Stockholders Equity | 32.97B | 32.65B | 27.31B | 22.53B | 21.94B | 18.90B |
Cash Flow | ||||||
| Free Cash Flow | 13.09B | 11.57B | 11.76B | 12.12B | 8.46B | 10.03B |
| Operating Cash Flow | 13.99B | 13.19B | 13.45B | 13.93B | 10.44B | 12.80B |
| Investing Cash Flow | -7.81B | -10.30B | -4.94B | -7.07B | -4.20B | -5.97B |
| Financing Cash Flow | -6.55B | -3.83B | -7.08B | -1.77B | -4.96B | -13.35B |
International Business Machines Technical Analysis
Positive
253.47
Price Trends
244.56
Positive
255.41
Positive
269.02
Positive
Market Momentum
18.90
Negative
59.29
Neutral
61.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBM, the sentiment is Positive. The current price of 253.47 is below the 20-day moving average (MA) of 255.58, above the 50-day MA of 244.56, and below the 200-day MA of 269.02, indicating a bullish trend. The MACD of 18.90 indicates Negative momentum. The RSI at 59.29 is Neutral, neither overbought nor oversold. The STOCH value of 61.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IBM.
International Business Machines Risk Analysis
International Business Machines disclosed 25 risk factors in its most recent earnings report. International Business Machines reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
International Business Machines Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $25.21B | 11.39 | 14.79% | 1.46% | 6.55% | -3.10% | |
74 Outperform | $109.43B | 14.32 | 24.82% | 2.25% | 7.27% | 0.49% | |
73 Outperform | $50.94B | 15.21 | 31.77% | 2.58% | 4.85% | 6.19% | |
72 Outperform | $267.72B | 24.86 | 35.54% | 2.21% | 9.67% | 94.28% | |
66 Neutral | $21.84B | 15.75 | 15.03% | 2.78% | -0.55% | -3.97% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
IBM
International Business Machines
284.84
19.55
7.37%
ACN
Accenture
178.25
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-42.23%
CTSH
Cognizant
53.21
-25.60
-32.48%
INFY
Infosys
12.40
-5.66
-31.32%
WIT
Wipro
2.10
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-25.61%
International Business Machines Corporate Events
Business Operations and Strategy
IBM Announces Major Investment to Expand Quantum Computing Leadership
Positive
May 28, 2026
IBM told investors on May 28, 2026, that it plans to invest more than $10 billion over the next five years to expand its quantum computing leadership, funding research and development, capital expenditures, ecosystem partnerships, manufacturing sc...
Business Operations and StrategyShareholder Meetings
IBM Shareholders Endorse Board, Pay and Incentive Plan
Positive
May 1, 2026
IBM shareholders met on April 28, 2026, and re-elected all nominees to the board of directors for one-year terms, with most directors receiving strong majority support, though veteran director Andrew N. Liveris drew a comparatively higher level of...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.