Now trading at a price of $164.03, International Business Machines has moved -0.4% so far today.
International Business Machines returned gains of 9.9% last year, with its stock price reaching a high of $166.34 and a low of $120.55. Over the same period, the stock underperformed the S&P 500 index by -6.3%. As of April 2023, the company's 50-day average price was $148.58. International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. Based in Armonk, NY, the large-cap Technology company has 288,300 full time employees. International Business Machines has offered a 4.0% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $79,591 | $57,714 | $55,179 | $57,350 | $60,530 | $61,170 |
| Revenue Growth | n/a | -27.49% | -4.39% | 3.93% | 5.54% | 1.06% |
| Operating Margins | 14% | 12% | 7% | 8% | 3% | 13% |
| Net Margins | 11% | 16% | 10% | 10% | 3% | 12% |
| Net Income (MM) | $8,728 | $9,431 | $5,590 | $5,743 | $1,783 | $7,099 |
| Net Interest Expense (MM) | $1,482 | $1,956 | $1,830 | $1,550 | $1,566 | $1,860 |
| Depreciation & Amort. (MM) | $3,127 | $4,209 | $4,227 | $3,888 | $2,407 | $2,243 |
| Earnings Per Share | $9.52 | $10.56 | $6.23 | $6.35 | $1.8 | $7.569999999999999 |
| EPS Growth | n/a | 10.92% | -41.0% | 1.93% | -71.65% | 320.56% |
| Diluted Shares (MM) | 916 | 893 | 897 | 905 | 912 | 949 |
| Free Cash Flow (MM) | $11,852 | $12,484 | $15,579 | $10,734 | $9,089 | $12,079 |
| Capital Expenditures (MM) | $3,395 | $2,286 | $2,618 | $2,062 | $1,346 | $1,354 |
| Current Ratio | 1.29 | 1.02 | 0.98 | 0.88 | 0.92 | 0.91 |
| Total Debt (MM) | $52,863 | $73,194 | $64,467 | $59,404 | $48,939 | $50,927 |
| Net Debt / EBITDA | 2.85 | 5.68 | 6.23 | 6.01 | 9.77 | 4.16 |
International Business Machines suffers from weak revenue growth and decreasing reinvestment in the business, weak operating margins with a stable trend, and declining EPS growth. The firm's financial statements also exhibit irregular cash flows and a highly leveraged balance sheet.
A Lower P/E Ratio Than Its Sector Average but Trades Above Its Graham Number:
International Business Machines has a trailing twelve month P/E ratio of 19.1, compared to an average of 35.0 for the Technology sector. Based on its EPS guidance of $9.27, the company has a forward P/E ratio of 16.0. The -0.4% compound average growth rate of International Business Machines's historical and projected earnings per share yields a PEG ratio of -50.46. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing International Business Machines in terms of its equity because its P/B ratio is 6.49 while the sector average is 7.92. The company's shares are currently trading 153.9% above their Graham number.
International Business Machines Has an Analyst Consensus that Shares Are Overpriced:
The 14 analysts following International Business Machines have set target prices ranging from $102.17 to $166.25 per share, for an average of $137.93 with a buy rating. As of April 2023, the company is trading 7.7% away from its average target price, indicating that there is an analyst belief that shares are overpriced.
International Business Machines has an average amount of shares sold short because 3.0% of the company's shares are sold short. Institutions own 59.4% of the company's shares, and the insider ownership rate stands at 0.09%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $13,463,171,070.
