International Business Machines Corporation — Intrinsic Value & Fair Price

IBM

NYSETechnologyInformation Technology ServicesCIK 0000051143ibm.comAbout IBM

Last close · Oct 16, 2026232.14−1.98 (−0.85%)

Market cap$218.7B

Model value · DCF · Perpetuity growth · 5y

263.52

IBM closed at $232.14 — undervalued by 12% vs model.

150.02the model's range733.12

DCF · Perpetuity growth · 5y leads for a mature, steady company — positive operating income and three years of positive free cash flow. From a five-year discounted cash flow.

Other models

45.76 – 290.93

Wall St. target

237.50 2% below

Below model, 1y

12 of 78 days

Price and model value

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What the marks mean

Daily close

Valuation models

price $232.14 · as of Oct 17, 2026

DCF · Perpetuity growth · 5yused150.02 – 733.12263.5212% undervalued DCF · Perpetuity growth · 10y170.00 – 762.24286.6919% undervalued DCF · EBITDA exit · 5y90.85 – 237.24157.9247% overvalued DCF · EBITDA exit · 10y123.42 – 292.18195.5119% overvalued P/E · peers183.66 – 336.02225.023% overvalued P/E · own history248.68 – 525.23290.9320% undervalued PEG—98.49136% overvalued EV/EBITDA · peers134.02 – 240.39173.8234% overvalued EV/Revenue · peers47.59 – 421.66228.931% overvalued Earnings power value28.44 – 71.8845.76407% overvalued Dividend discount77.80 – 178.27108.30114% overvalued Wall St. consensus target—237.502% below Cost of capital (WACC)—7.40%—

DCF · Perpetuity growth · 5y leads for a mature, steady company — positive operating income and three years of positive free cash flow. How we value a stock walks through every input.

engine pkg:0.1.0

Dividends

Quarterly · as of Oct 16, 2026

Yield, trailing 12 months

2.90%

Past 2 years

low 2.04%high 3.51%

Dividends per share, a year at a time

Dividends / free cash flow, FY2025: 51.7%
Raised: 30 years in a row
Growth, 5 yrs: 1.5% a year
Last change: +0.6% · May 2026

Every payment, with ex-dates · latest $1.69, paid Sep 10, 2026

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How it is valued

Valued asMature & stable

Low/slowing growth (~4% recent)Moderate margins (16% net margin)Pays dividendsHighly cyclical earningsHigh leverage (D/E 2.1x)Strong FCF yield (5.5%)

What growth the price implies: the reverse DCF

Key figures

FY2025 · chosen for mature companies

P/E

20.8×

EV / EBITDA

15.8×

FCF yield

5.3%

Dividend yield, TTM

2.90%

Beta

0.72

Cost of capital (WACC)

7.40%

On the lists: #44 Dividend growth streaks

Full financials

Superinvestors

13F · Q2 2026

Dodge & CoxDodge & Cox$12.9M Arnold Van Den BergVan Den Berg Management I, Inc$11.2M Mairs & PowerMairs & Power Inc$1.0M Kahn BrothersKahn Brothers Group Inc$345,325

All 4 holders

Analyst actions

third-party, quoted

10-09Truist Financial · target240.00

08-31Susquehanna · target235.00

07-24Susquehanna · target225.00

07-14HSBC · “Reduce” from “Hold”downgrade

Ratings, targets and estimates

Recent

filings, insider trades and key news

10-018-K · 5.02Departure/Election of Directors or Officers 09-30Form 4 · ALaguarta Ramon · 415 sh@ 219.93 09-30Form 4 · AGorsky Alex · 489 sh@ 219.93 09-30Form 4 · AHOWARD MICHELLE J · 291 sh@ 219.93 09-30Form 4 · ALIVERIS ANDREW N · 444 sh@ 219.93 09-30Form 4 · AMCNABB FREDERICK WILLIAM III · 415 sh@ 219.93

81 filings · 40 insider transactions

Comparable companies

by business, not by industry label

ACNAccenture ORCLOracle MSFTMicrosoft HPEHewlett Packard Enterprise CTSHCognizant CSCOCisco DELLDell Technologies

2 more companies list IBM as a comparable

NTAPNetApp PLTRPalantir

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About IBM

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. The Software division provides hybrid cloud platforms and a range of software offerings, including Red Hat's enterprise open-source solutions. It also develops software for business automation, AIOps and management, integration, and application servers, in addition to data and artificial intelligence tools. This segment further supplies security software and services for threat, data, and identity management, and offers critical transaction processing software that supports essential on-premise workloads for industries such as banking, airlines, and retail. The Consulting arm delivers business transformation services, which encompass strategy development, business process design and operational improvements, data and analytics insights, and system integration. It additionally provides technology consulting and specialized application and cloud platform services. IBM's Infrastructure segment offers both on-premises and cloud-based server and storage solutions, specifically tailored for clients' crucial and regulated operations. It also extends support and solutions for hybrid cloud infrastructure, alongside remanufacturing and remarketing services for used equipment. The Financing segment provides various financial services, such as leasing, installment payment plans, loan financing, and short-term working capital solutions. Originally established in 1911 as the Computing-Tabulating-Recording Co., the company is now known as International Business Machines Corporation and maintains its headquarters in Armonk, New York.

CEO: Arvind Krishna
Headquarters: Armonk, NY
Employees: 264,300
IPO: 1915-09-24

Full company profile

Model estimates for research reference only, not investment advice. Every model rests on assumptions that may not match what happens; the formulas are in how we value a stock.