---
title: IBM (IBM) — intrinsic value and fair price
canonical: https://sweetvaluelab.com/stocks/ibm
ticker: IBM
as_of: 2026-10-17
sector: Technology
industry: Information Technology Services
---
# IBM (IBM)

IBM (IBM) closed at $232.14 on Oct 16, 2026, undervalued by 12% vs its model value of $263.52 (from a five-year discounted cash flow).

## Key figures

| Figure | Value |
| --- | ---: |
| Last close | $232.14 (Oct 16, 2026) |
| Model value (from a five-year discounted cash flow) | $263.52 |
| Price vs model | undervalued by 12% vs model |
| Range of that model | $150.02 – $733.12 |
| Market value | $218.7B |
| P/E (fiscal 2025) | 20.8 |
| Net margin (fiscal 2025) | 15.7% |
| Free cash flow (fiscal 2025) | $12.1B |
| Dividend yield (trailing twelve months) | 2.90% |
| Beta | 0.72 |
| Cost of capital (WACC) | 7.40% |
| Business classification | Dividend Payer (Low/slowing growth (~4% recent), Moderate margins (16% net margin), Pays dividends, Highly cyclical earnings, High leverage (D/E 2.1x), Strong FCF yield (5.5%)) |

## On the stock lists

| List | Place | Figure | Page |
| --- | ---: | ---: | --- |
| Dividend growth streaks | #44 | 30 years | https://sweetvaluelab.com/lists/dividend-growth-streaks |

## Dividends

| Figure | Value |
| --- | ---: |
| Trailing dividend yield | 2.90% |
| Dividends per share, last 12 months | $6.74 |
| Dividends / free cash flow (fiscal 2025) | 51.7% |
| Raised | 30 years in a row |
| Growth over 5 years | 1.5% a year |
| Latest payment | $1.69, ex-date Aug 10, 2026, paid Sep 10, 2026 |

| Year of payments | Dividends per share |
| --- | ---: |
| To Aug 9, 2021 | $6.25 |
| To Aug 9, 2022 | $6.58 |
| To Aug 9, 2023 | $6.62 |
| To Aug 9, 2024 | $6.66 |
| To Aug 8, 2025 | $6.70 |
| Trailing twelve months (to Aug 10, 2026) | $6.74 |

## Valuation models

Each model's value per share and the role the engine gave it for this business. The headline above is one model's value; every other model is listed with its own, and each has a page of its own under the valuation. Computed Oct 17, 2026.

| Model | Role | Value per share | Low | High |
| --- | --- | ---: | ---: | ---: |
| DCF · Perpetuity growth · 5y | primary | $263.52 | $150.02 | $733.12 |
| DCF · Perpetuity growth · 10y | cross check | $286.69 | $170.00 | $762.24 |
| DCF · EBITDA exit · 5y | cross check | $157.92 | $90.85 | $237.24 |
| DCF · EBITDA exit · 10y | cross check | $195.51 | $123.42 | $292.18 |
| P/E · peers | cross check | $225.02 | $183.66 | $336.02 |
| P/E · own history | cross check | $290.93 | $248.68 | $525.23 |
| PEG | sanity check | $98.49 | $98.49 | $98.49 |
| EV/EBITDA · peers | cross check | $173.82 | $134.02 | $240.39 |
| EV/Revenue · peers | cross check | $228.93 | $47.59 | $421.66 |
| Earnings power value | cross check | $45.76 | $28.44 | $71.88 |
| Dividend discount | cross check | $108.30 | $77.80 | $178.27 |

## Insider activity (SEC Form 4)

Past 90 days: 0 open-market buys ($0) and 1 open-market sale ($5.8M); 10b5-1 plan sales included.

| Date | Insider | Relationship | Transaction | Shares | Value |
| --- | --- | --- | --- | ---: | ---: |
| Sep 30, 2026 | Laguarta Ramon | Director | Grant / award | 415 | $91,271 |
| Sep 30, 2026 | Gorsky Alex | Director | Grant / award | 489 | $107,545.8 |
| Sep 30, 2026 | HOWARD MICHELLE J | Director | Grant / award | 291 | $63,999.6 |
| Sep 30, 2026 | LIVERIS ANDREW N | Director | Grant / award | 444 | $97,648.9 |
| Sep 30, 2026 | MCNABB FREDERICK WILLIAM III | Director | Grant / award | 415 | $91,271 |

## Recent SEC filings

| Filed | Form | What | Filing |
| --- | --- | --- | --- |
| Oct 1, 2026 | 8-K | 5.02 Departure/Election of Directors or Officers; 5.03 Amendment to Articles/Bylaws; 9.01 Financial Statements and Exhibits | https://www.sec.gov/Archives/edgar/data/51143/000005114326000086/ibm-20261001.htm |
| Aug 14, 2026 | 8-K | 9.01 Financial Statements and Exhibits | https://www.sec.gov/Archives/edgar/data/51143/000110465926097089/tm2623193d1_8k.htm |
| Aug 11, 2026 | 424B5 | Prospectus supplement | https://www.sec.gov/Archives/edgar/data/51143/000110465926094038/tm2621321-2_424b5.htm |
| Jul 23, 2026 | 10-Q | Quarterly report | https://www.sec.gov/Archives/edgar/data/51143/000005114326000078/ibm-20260630.htm |
| Jul 22, 2026 | 8-K | 2.02 Results of Operations (Earnings); 9.01 Financial Statements and Exhibits | https://www.sec.gov/Archives/edgar/data/51143/000005114326000077/ibm-20260722.htm |

## Superinvestors holding it (latest 13F)

| Manager | Quarter | Shares | Value |
| --- | --- | ---: | ---: |
| Dodge & Cox | 2026-06-30 | 45,995 | $12.9M |
| Arnold Van Den Berg | 2026-06-30 | 39,723 | $11.2M |
| Mairs & Power | 2026-06-30 | 3,647 | $1.0M |
| Kahn Brothers | 2026-06-30 | 1,228 | $345,325 |

4 tracked managers in all.

## About

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 dev…

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Source: https://sweetvaluelab.com/stocks/ibm (SweetValueLab, free, no account). Prices and statements from Financial Modeling Prep; filings from SEC EDGAR. Research and educational data, not investment advice; nothing here is a recommendation to buy, sell or hold any security.