International Business Machines Corporation Fundamental Analysis (NEO: IBM.NE)
International Business Machines Corporation Fundamental Analysis (NEO: IBM.NE)
International Business Machines Corporation (NEO: IBM.NE) shows moderate financial fundamentals with a PE ratio of 2.97, profit margin of 15.58%, and ROE of 33.81%. The company generates $68.9B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.1/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze IBM.NE's fundamental strength across five key dimensions:
Efficiency Score
WeakIBM.NE struggles to generate sufficient returns from assets.
Valuation Score
ExcellentIBM.NE trades at attractive valuation levels.
Growth Score
ModerateIBM.NE shows steady but slowing expansion.
Financial Health Score
WeakIBM.NE carries high financial risk with limited liquidity.
Profitability Score
ExcellentIBM.NE achieves industry-leading margins.
Key Financial Metrics
Is IBM.NE Expensive or Cheap?
P/E Ratio
IBM.NE trades at 2.97 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, IBM.NE's PEG of 0.05 indicates potential undervaluation.
Price to Book
The market values International Business Machines Corporation at 6.03 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.40 times EBITDA. This is generally considered low.
How Well Does IBM.NE Make Money?
Net Profit Margin
For every $100 in sales, International Business Machines Corporation keeps $15.58 as profit after all expenses.
Operating Margin
Core operations generate 17.22 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $33.81 in profit for every $100 of shareholder equity.
ROA
International Business Machines Corporation generates $7.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
International Business Machines Corporation produces operating cash flow of $14.93B, showing steady but balanced cash generation.
Free Cash Flow
International Business Machines Corporation generates strong free cash flow of $14.19B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.71 in free cash annually.
FCF Yield
IBM.NE converts 6.94% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
2.97
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.05
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.97
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.89
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.79
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.34
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How IBM.NE Stacks Against Its Sector Peers
| Metric | IBM.NE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 2.97 | 34.93 | Better (Cheaper) |
| ROE | 33.81% | 750.00% | Weak |
| Net Margin | 15.58% | -3058.00% (disorted) | Strong |
| Debt/Equity | 1.89 | 0.65 | Weak (High Leverage) |
| Current Ratio | 0.79 | 6.21 | Weak Liquidity |
| ROA | 7.11% | 308.00% | Weak |
IBM.NE outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews International Business Machines Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Growth, Innovation, High Beta
EPS CAGR
N/A
Industry Style: Growth, Innovation, High Beta
FCF CAGR
N/A
Industry Style: Growth, Innovation, High Beta