International Business Machines Corporation (IBM) AI Stock Analysis

International Business Machines Corporation operates across four business segments: Software, Consulting, Infrastructure, and Financing. The Software segment provides hybrid cloud platforms, including Red Hat enterprise open-source offerings, alongside business automation, data analytics, artificial intelligence solutions, and cybersecurity software. The Consulting segment delivers business transformation services, strategy development, systems integration, and cloud application services. The Infrastructure segment offers on-premises and cloud servers, storage solutions, and remanufacturing of used equipment. IBM serves clients globally, supporting mission-critical transaction processing for banking, retail, and airline industries.

IBM reported annual revenue growth of 7.6% in FY2025, reaching $67.54B, up from $62.75B in FY2024 and $57.35B in FY2021. Gross margin expanded from 54.9% in FY2021 to 58.2% in FY2025, while operating margin rose to 18.5%. Net income increased to $10.59B in FY2025, translating to an EPS of $11.57 and a net margin of 15.7%. Over the 5-year period from FY2020 to FY2025, revenue CAGR was -1.7%. For the trailing twelve months, revenue reached $69.09B with an operating margin of 16.6%. In the latest quarter ending June 30, 2026, quarterly revenue grew 1.1% year-over-year, while quarterly earnings declined 1.8%.

As of June 30, 2026, IBM held $8.13B in cash and short-term investments against $65.27B in total debt, resulting in net debt of $57.14B. The company recorded a current ratio of 0.79 and a debt-to-equity ratio of 1.89 with shareholders' equity of $34.45B. In FY2025, operating cash flow stood at $13.19B and free cash flow reached $12.10B. Capital allocation in FY2025 included $1.09B for capital expenditures, $1.02B for share buybacks, and $6.25B paid in dividends.

IBM trades at a trailing P/E of 20.6x and a forward P/E of 17.4x, which are both below the median of its S&P 500 Technology peers at 31.5x and 20.9x, respectively. Its price-to-sales ratio of 3.2x and EV-to-EBITDA of 15.7x also sit lower than the peer medians of 6.3x and 19.9x. The stock has dropped 13.7% over the past year and fell 20.0% year-to-date, trailing the S&P 500 benchmark return of 16.8% over the past year. Over a five-year period, IBM delivered a return of 103.5% compared to 83.0% for the S&P 500.

IBM pays an annual forward dividend of $6.76 per share, yielding 2.91% with a payout ratio of 56.1%. The company distributes dividends quarterly and has paid dividends for 42 consecutive years. Over the past five years, IBM's annualized dividend growth rate was 1.5%. Its last ex-dividend date occurred on August 10, 2026.

Wall Street coverage consists of 9 Strong Buy, 3 Buy, 11 Hold, 1 Sell, and 1 Strong Sell recommendations. The mean price target is $242.65, representing a 4.5% upside over the last close of $232.14. For the current fiscal year ending December 31, 2026, analysts estimate revenue of $70.38B and EPS of $12.31, representing 6.2% earnings growth. IBM has beaten EPS estimates in 3 of the last 4 quarters. The next earnings date is October 21, 2026.

This page is an AI-written research summary of International Business Machines Corporation (IBM). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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