International Business Machines Corp

IBM

Computer & office Equipment

Mkt Cap

$155.6B

PE

19.02

Debt

$66.19B

Cash

$14.77B

EV

$207B

FCF

$13.14B

Market Cap

$155.6B

P/E Ratio

19.02

Debt

$66.19B

Cash

$14.77B

EV

$207B

FCF

$13.14B

Charts data: {"Earnings":[{"time":"2014-12-30","value":12022000000},{"time":"2015-12-30","value":13190000000},{"time":"2016-12-30","value":11872000000},{"time":"2017-12-30","value":5753000000},{"time":"2018-12-30","value":8728000000},{"time":"2019-12-30","value":9431000000},{"time":"2020-12-30","value":5590000000},{"time":"2021-12-30","value":5743000000},{"time":"2022-12-30","value":1639000000},{"time":"2023-12-30","value":7502000000}],"Sales":[{"time":"2014-12-30","value":92793000000},{"time":"2015-12-30","value":81741000000},{"time":"2016-12-30","value":79919000000},{"time":"2017-12-30","value":79139000000},{"time":"2018-12-30","value":79591000000},{"time":"2019-12-30","value":77147000000},{"time":"2020-12-30","value":73620000000},{"time":"2021-12-30","value":57350000000},{"time":"2022-12-30","value":60530000000},{"time":"2023-12-30","value":61860000000}],"Net Margins":[{"time":"2014-12-30","value":0.12955718642570022},{"time":"2015-12-30","value":0.16136333051956792},{"time":"2016-12-30","value":0.14855040728737848},{"time":"2017-12-30","value":0.07269487863126903},{"time":"2018-12-30","value":0.10966064002211305},{"time":"2019-12-30","value":0.1222471385795948},{"time":"2020-12-30","value":0.07593045368106492},{"time":"2021-12-30","value":0.10013949433304271},{"time":"2022-12-30","value":0.027077482240211465},{"time":"2023-12-30","value":0.12127384416424183}],"Assets":[{"time":"2014-12-30","value":117532000000},{"time":"2015-12-30","value":110495000000},{"time":"2016-12-30","value":117470000000},{"time":"2017-12-30","value":125356000000},{"time":"2018-12-30","value":123382000000},{"time":"2019-12-30","value":152186000000},{"time":"2020-12-30","value":155971000000},{"time":"2021-12-30","value":132001000000},{"time":"2022-12-30","value":127243000000},{"time":"2023-12-30","value":135241000000}],"Stockholders Equity":[{"time":"2014-12-30","value":12014000000},{"time":"2015-12-30","value":14424000000},{"time":"2016-12-30","value":18392000000},{"time":"2017-12-30","value":17725000000},{"time":"2018-12-30","value":16929000000},{"time":"2019-12-30","value":20985000000},{"time":"2020-12-30","value":20727000000},{"time":"2021-12-30","value":18996000000},{"time":"2022-12-30","value":22021000000},{"time":"2023-12-30","value":22613000000}],"ROE":[{"time":"2014-12-30","value":1.000665889795239},{"time":"2015-12-30","value":0.9144481419855796},{"time":"2016-12-30","value":0.6454980426272292},{"time":"2017-12-30","value":0.32456981664315937},{"time":"2018-12-30","value":0.5155650067930769},{"time":"2019-12-30","value":0.4494162497021682},{"time":"2020-12-30","value":0.26969653109470737},{"time":"2021-12-30","value":0.30232680564329334},{"time":"2022-12-30","value":0.07442895418010081},{"time":"2023-12-30","value":0.33175606951753417}],"ROA":[{"time":"2014-12-30","value":0.1700473062655277},{"time":"2015-12-30","value":0.14430517217973665},{"time":"2016-12-30","value":0.10496296926874947},{"time":"2017-12-30","value":0.09094100003190912},{"time":"2018-12-30","value":0.09192588870337651},{"time":"2019-12-30","value":0.06679983704151499},{"time":"2020-12-30","value":0.02972988568387713},{"time":"2021-12-30","value":0.036643661790440984},{"time":"2022-12-30","value":0.00908497913441211},{"time":"2023-12-30","value":0.06425566211429966}]}

International Business Machines Corporation, together with its subsidiaries, 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; 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. This segment also provides transaction processing software that supports clients' mission-critical and on-premise workloads in banking, airlines, and retail industries. The Consulting segment offers business transformation services, including strategy, business process design and operations, data and analytics, and system integration services; technology consulting services; and application and cloud platform services. The Infrastructure segment provides on-premises and cloud-based server and storage solutions for its clients' mission-critical and regulated workloads; and support services and solutions for hybrid cloud infrastructure, as well as remanufacturing and remarketing services for used equipment. The Financing segment offers lease, installment payment, loan financing, and short-term working capital financing services. The company has collaboration agreement with Siemens Digital Industri Software to develop a combined software solution. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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3/31/22
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12/31/21
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9/30/21
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3/31/21
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3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of International Business Machines Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$13.14B	$12.72B	$12.31B	$11.91B	$11.52B	$11.15B	$10.79B	$10.44B	$10.11B	$9.78B	$9.464B	$94.64B
DCF		$11.06B	$9.305B	$7.83B	$6.589B	$5.545B	$4.666B	$3.926B	$3.304B	$2.78B	$2.339B	$23.39B
Value	$80.74B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -14%

Earnings Stability 48%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	16%	15%	7.3%	11%	12%	7.6%	10%	2.7%	12%	13%
ROA	14%	10%	9.1%	9.2%	6.7%	3%	3.7%	0.91%	6.4%	6.3%
ROE	91%	65%	32%	52%	45%	27%	30%	7.4%	33%	35%

What is the average Net Margin?

The average Net Margin over the past 5 years is +9.27%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.58%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +4.97%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.87%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +32.39%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -5.75%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	3.37	3.63	3.89	4.51	5.69	4.44	5.51	6.24	5.05	5.04
Debt Equity	3.14	2.65	2.96	3.15	3.38	3.34	3.11	2.58	2.83	2.84
MIN
Graham Stability	-	-	47%	85%	100%	70%	73%	24%	100%	24%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.04.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.16.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.24.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	-3.6%	-4.9%	-5.6%	2.2%	0.54%
Net Income	-6.3%	-3%	10%	360%	20%
Stockholders Equity	3%	6%	2.9%	2.7%	-1.8%
FCF	-0.77%	1.4%	-6.6%	40%	1.3%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -4.92%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.54%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -2.98%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +20.4%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +5.96%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -1.84%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +1.37%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +1.29%.