International Business Machines Corporation (IBM) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Technology · Information Technology Services
Is International Business Machines Corporation a safe investment right now?
International Business Machines Corporation's Altman Z-Score of 3.32 places it in the safe zone. Our fair value estimate is $223.49 (Fairly Valued). Moat rating: 3.3/5 stars.
Could International Business Machines Corporation go bankrupt? Altman Z-Score analysis
Z-Score of 3.32 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives IBM's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | -0.0113 | 1.2 | -0.01 |
| B · Retained Earnings / Total Assets | RE / TA | 1.0248 | 1.4 | 1.43 |
| C · EBIT / Total Assets | EBIT / TA | 0.0807 | 3.3 | 0.27 |
| D · Market Cap / Total Liabilities | MCap / TL | 1.9838 | 0.6 | 1.19 |
| E · Revenue / Total Assets | Rev / TA | 0.4447 | 1.0 | 0.44 |
How has IBM's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 3.51 | Safe |
| 2023 | 3.52 | Safe |
| 2024 | 3.48 | Safe |
| 2025 | 3.32 | Safe |
Source: Calculated from IBM's latest 10-K filing on SEC EDGAR.
What is International Business Machines Corporation actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $11.64 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $11.17 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $12.35 | 20 analysts consensus |
| Trailing P/E | 22.6x | Current market pricing |
| Fair P/E (β discount) | 19.2x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Growing | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $296.33 (20 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does International Business Machines Corporation have a durable competitive advantage?
Moat rating: 3.3/5.
What makes up IBM's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 3/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 4/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is IBM's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | 3.2% | — |
| 2023 | 13.0% | Rising |
| 2024 | 9.1% | Declining |
| 2025 | 13.1% | Rising |
Source: ROIC calculated from SEC EDGAR filings.
Is International Business Machines Corporation's dividend safe?
Can International Business Machines Corporation afford its dividend?
Payout ratio is 60.2%. FCF covers the dividend 1.4x. 65 consecutive years of payments.
International Business Machines Corporation's key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $67.5B | $62.8B | $60.5B | Rising |
| Net Income | $10.6B | $6.0B | $1.6B | Rising |
| Free Cash Flow | $11.5B | $11.8B | $8.5B | Rising |
| Gross Margin | 58.2% | 56.6% | 54.0% | Rising |
Recent events that affect our IBM analysis
IBM analyst consensus: 57% bullish (12 of 21 analysts)
2 Strong Buy, 10 Buy, 7 Hold, 1 Sell, 1 Strong Sell. Consensus target: $296.33 (17.7% upside). Compare with our independent Fair Value: $223.49.
IBM beat EPS estimates by 5.5%
Reported EPS: $1.91 vs estimate $1.81. Earnings strength supports our Fair Value of $223.49 (11.3% below current price).
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
IBM paid $1.6800/share dividend
Dividend Safety Grade: B. Payout ratio: 60.2%.
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM beat EPS estimates by 5.3%
Reported EPS: $4.52 vs estimate $4.29. Earnings strength supports our Fair Value of $223.49 (11.3% below current price).
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM paid $1.6800/share dividend
Dividend Safety Grade: B. Payout ratio: 60.2%.
IBM filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM beat EPS estimates by 8.3%
Reported EPS: $2.65 vs estimate $2.45. Earnings strength supports our Fair Value of $223.49 (11.3% below current price).
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM paid $1.6800/share dividend
Dividend Safety Grade: B. Payout ratio: 60.2%.
IBM filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM beat EPS estimates by 5.5%
Reported EPS: $2.80 vs estimate $2.65. Earnings strength supports our Fair Value of $223.49 (11.3% below current price).
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM paid $1.6800/share dividend
Dividend Safety Grade: B. Payout ratio: 60.2%.
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM beat EPS estimates by 4.0%
Reported EPS: $1.12 vs estimate $1.08. Earnings strength supports our Fair Value of $223.49 (11.3% below current price).
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
IBM paid $1.6700/share dividend
Dividend Safety Grade: B. Payout ratio: 60.2%.
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
IBM beat EPS estimates by 3.8%
Reported EPS: $3.92 vs estimate $3.78. Earnings strength supports our Fair Value of $223.49 (11.3% below current price).
IBM filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about International Business Machines Corporation
What is International Business Machines Corporation stock price today?
International Business Machines Corporation (IBM) stock price is $251.86 as of the latest market close, traded on the NYSE exchange.
What does International Business Machines Corporation do?
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers hybrid cloud and AI platforms that allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
What is International Business Machines Corporation market cap?
International Business Machines Corporation has a market capitalization of $236.35B, classifying it as a mega-cap stock in the Technology sector.
What sector and industry is IBM in?
International Business Machines Corporation operates in the Technology sector, specifically within the Information Technology Services industry. It trades on the NYSE under the ticker symbol IBM.
Is IBM stock overvalued or undervalued?
Based on our valuation model, International Business Machines Corporation trades 12.7% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $223.49
- Current Price: $251.86
- Valuation Zone: Fairly Valued
What is IBM stock forecast and analyst target price?
Based on 20 Wall Street analysts, the consensus price target for International Business Machines Corporation is $296.33, implying upside of 17.7% from the current price.
- Analyst High Target: $390.00
- Analyst Low Target: $215.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is International Business Machines Corporation revenue and earnings growing?
Here are the analyst consensus growth estimates for International Business Machines Corporation:
- Revenue growth (current year est.): 5.4%
- EPS growth (current year est.): 6.6%
- Revenue growth (next year est.): 4.6%
- EPS growth (next year est.): 8.4%
What are International Business Machines Corporation's key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $67.5B | Rising |
| Net Income | $10.6B | Rising |
| Free Cash Flow | $11.5B | Rising |
| Gross Margin | 58.2% | Rising |
What is IBM's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 22.6x
- Forward P/E (next 12 months est.): 18.8x
- FairValueLabs Fair P/E: 19.2x
How volatile is IBM stock?
International Business Machines Corporation has a beta of 0.69, meaning it is less volatile than the broader market. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does International Business Machines Corporation have?
International Business Machines Corporation's balance sheet shows:
- Total Cash: $14.42B
- Total Debt: $64.61B
- Net Cash Position: $-50.19B
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is International Business Machines Corporation's free cash flow?
International Business Machines Corporation generated $13.16B in trailing twelve-month free cash flow (from $13.19B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does International Business Machines Corporation pay a dividend, and is it safe?
Yes, International Business Machines Corporation pays a regular dividend. Here are the key metrics:
- Dividend Yield: 2.6%
- Payout Ratio: 60.2%
- Consecutive Years Paid: 65
- 5-Year Dividend Growth: -23.3%
- FairValueLabs Safety Grade: B
Is International Business Machines Corporation at risk of going bankrupt?
International Business Machines Corporation's Altman Z-Score is 3.32, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does International Business Machines Corporation have a durable competitive advantage?
International Business Machines Corporation scores 3.3/5 stars (Narrow moat) in our moat analysis:
- ROIC Stability: 3/5
- Gross Margin Trend: 4/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is IBM's return on equity (ROE)?
International Business Machines Corporation's return on equity is 35.2%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy IBM stock?
IBM shares can be purchased through any brokerage account that provides access to the NYSE. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol IBM
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is IBM a value stock or speculative?
FairValueLabs classifies International Business Machines Corporation as Value Investment. It exhibits consistent profitability, reasonable valuation, and financial stability — characteristics of a traditional value investment.
Who is the CEO of International Business Machines Corporation?
The current CEO of International Business Machines Corporation is Mr. Arvind Krishna.
What is IBM's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $11.13
- Forward EPS (next 12 months est.): $13.38
- Analyst consensus EPS (this year): $12.35
- Analyst consensus EPS (next year): $13.38
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
IBM analysis methodology: How we calculate fair value, Z-Scores, and moat ratings