IBM Corp. (IBM)
Technology · NYSE · US
Fundamentals
Valuation and ratings
IBM Corp. trades at $219.05, which is 54% below the $336.74 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 78 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 25.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About IBM Corp.
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. The Consulting segment delivers strategy and technology services and intelligent operations, providing business transformation, technology implementation, managed services, application modernization, and AI-powered solutions. The Infrastructure segment provides on-premises and cloud-based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, and facilitates IBM clients' acquisition of hardware, software, and services. It operates a data streaming platform. The company has strategic partnerships with various companies, including hyperscalers, service providers, global system integrators, and software and hardware vendors that include Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. It also has a strategic collaboration with Arm Holdings plc for the development of new dual-architecture hardware that helps enterprises run future AI and data intensive workloads; strategic partnership with three.ws to advance ai-powered 3d agent technology; and collaboration with Lightwell to help strengthen open source software supply chain. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.
IBM passes 5 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
15 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$455.56M · 0.2% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$106.78M · 0.1% of book
- Ken Griffin, CITADEL ADVISORS LLC$89.00M · 0.0% of book
- Marshall Wace, MARSHALL WACE, LLP$69.83M · 0.1% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$48.75M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is IBM Corp. (IBM) undervalued?
Against our discounted cash flow estimate of $336.74, IBM at $219.05 is 54% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own IBM?
15 of the institutions we track reported a position in IBM in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is IBM's P/E ratio?
IBM trades at 25.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.