Want to see IBM full AI Analyst Report?
Top Page
International Business Machines
(NYSE:IBM)
Select Model
Select Model
Rating:66Neutral
Price Target:
$313.00
â–²(23.49% Upside)
Action:Downgraded
Date:06/24/26
IBM’s score is driven primarily by strong profitability and free-cash-flow generation, tempered by elevated leverage on the balance sheet. The latest earnings call reinforces improving operating momentum and reaffirmed 2026 growth/FCF targets, but technical indicators are currently weak and valuation is only moderate given the company’s modest growth profile.
Positive Factors
Free cash flow generation
Sustained FCF near $13B annually and positive FCF growth provide durable internal funding for R&D, dividends, buybacks, and strategic M&A. High cash conversion supports reinvestment into software and AI initiatives and cushions the business through cyclical IT spending downturns, strengthening long-term resilience.
Negative Factors
Elevated leverage
High debt relative to equity reduces financial flexibility and increases refinancing and interest-rate vulnerability. With operating cash flow covering only ~0.34x of total debt, leverage constrains optionality for acquisitions or aggressive buybacks and heightens downside risk if revenue or cash generation weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Sustained FCF near $13B annually and positive FCF growth provide durable internal funding for R&D, dividends, buybacks, and strategic M&A. High cash conversion supports reinvestment into software and AI initiatives and cushions the business through cyclical IT spending downturns, strengthening long-term resilience.
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
$272.12B
Dividend Yield2.21%
Average Volume (3M)10.65M
Price to Earnings (P/E)25.2
Beta (1Y)0.79
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. Volume8,122,323
30 Day Avg. Volume10,650,863
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 Cap1.12
Enterprise Value/Revenue4.43
Enterprise Value/Gross Profit7.52
Enterprise Value/Ebitda17.33
Forecast
1Y Price Target
$302.06Price Target Upside19.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)12.43
Revenue Forecast (FY)$71.49B
International Business Machines Business Overview & Revenue Model
Company Description
International Business Machines Corporation (IBM) delivers comprehensive technology solutions and services across the globe. The company's operations are structured into four primary segments: Software, Consulting, Infrastructure, and Financing. T...
How the Company Makes Money
IBM makes money primarily by selling enterprise software subscriptions, delivering consulting services, and providing infrastructure systems along with ongoing support and maintenance. A significant portion of revenue comes from Software, where IB...
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 | 17.63B | 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 | 69.80B | 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
254.94
Positive
251.05
Positive
271.49
Positive
Market Momentum
5.34
Negative
61.62
Neutral
90.16
Negative
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 273.02, below the 50-day MA of 254.94, and below the 200-day MA of 271.49, indicating a bullish trend. The MACD of 5.34 indicates Negative momentum. The RSI at 61.62 is Neutral, neither overbought nor oversold. The STOCH value of 90.16 is Negative, 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 | $20.71B | 9.35 | 14.79% | 1.46% | 6.55% | -3.10% | |
72 Outperform | $84.05B | 10.88 | 24.82% | 2.25% | 6.74% | -0.66% | |
71 Outperform | $45.24B | 14.40 | 31.77% | 2.58% | 4.85% | 6.19% | |
66 Neutral | $272.12B | 25.15 | 35.54% | 2.21% | 9.67% | 94.28% | |
66 Neutral | $19.12B | 13.80 | 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
289.52
4.83
1.70%
ACN
Accenture
137.35
-159.69
-53.76%
CTSH
Cognizant
41.99
-37.31
-47.05%
INFY
Infosys
11.16
-7.22
-39.29%
WIT
Wipro
1.89
-1.10
-36.70%
International Business Machines Corporate Events
Business Operations and StrategyPrivate Placements and Financing
IBM Extends Syndicated Credit Facilities, Enhancing Liquidity
Positive
Jun 23, 2026
On June 22, 2026, IBM extended the maturities of its existing $2.5 billion three-year and $7.5 billion five-year syndicated credit agreements with a consortium of global banks, including JPMorgan Chase, BNP Paribas, Citibank and Royal Bank of Cana...
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.