Now trading at a price of $167.69, International Business Machines has moved -8.9% so far today.
International Business Machines returned gains of 45.0% last year, with its stock price reaching a high of $199.18 and a low of $120.55. Over the same period, the stock outperformed the S&P 500 index by 22.4%. More recently, the company's 50-day average price was $188.14. International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. Based in Armonk, NY, the Large-Cap Technology company has 282,200 full time employees. International Business Machines has offered a 2.7% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $79,591 | $57,714 | $55,179 | $57,350 | $60,530 | $61,860 |
| Gross Margins | 46% | 55% | 56% | 55% | 54% | 55% |
| Net Margins | 11% | 16% | 10% | 10% | 3% | 12% |
| Net Income (M) | $8,728 | $9,431 | $5,590 | $5,743 | $1,639 | $7,502 |
| Net Interest Expense (M) | $723 | $1,344 | $1,288 | $1,155 | $1,216 | $1,607 |
| Depreciation & Amort. (M) | $3,127 | $4,209 | $4,227 | $3,888 | $2,407 | $2,109 |
| Diluted Shares (M) | 916 | 893 | 897 | 905 | 912 | 922 |
| Earnings Per Share | $9.52 | $10.56 | $6.23 | $6.35 | $1.8 | $8.14 |
| EPS Growth | n/a | 10.92% | -41.0% | 1.93% | -71.65% | 352.22% |
| Avg. Price | $107.61 | $107.53 | $102.36 | $116.9 | $125.08 | $168.1575 |
| P/E Ratio | 11.24 | 10.12 | 16.3 | 18.24 | 68.73 | 20.43 |
| Free Cash Flow (M) | $11,852 | $12,484 | $15,579 | $10,734 | $9,089 | $12,686 |
| CAPEX (M) | $3,395 | $2,286 | $2,618 | $2,062 | $1,346 | $1,245 |
| EV / EBITDA | 9.72 | 14.08 | 20.47 | 17.14 | 43.66 | 18.15 |
| Total Debt (M) | $52,863 | $73,194 | $61,400 | $51,704 | $50,949 | $56,547 |
| Net Debt / EBITDA | 2.87 | 5.7 | 7.09 | 5.16 | 12.09 | 4.03 |
| Current Ratio | 1.29 | 1.02 | 0.98 | 0.88 | 0.92 | 0.96 |
International Business Machines's financial statements include several red flags such as declining revenues and decreasing reinvestment in the business, declining EPS growth, and not enough current assets to cover current liabilities because its current ratio is 0.96. Additionally, the firm has a highly leveraged balance sheet. On the other hand, the company benefits from wider gross margins than its peer group and generally positive cash flows.
an Increase in Expected Earnings Improves Its Value Outlook but Priced Beyond Its Margin of Safety:
International Business Machines has a trailing twelve month P/E ratio of 23.1, compared to an average of 35.0 for the Technology sector. Based on its EPS guidance of $10.66, the company has a forward P/E ratio of 17.6. The 1.6% compound average growth rate of International Business Machines's historical and projected earnings per share yields a PEG ratio of 14.15. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing International Business Machines in terms of its equity because its P/B ratio is 6.61 while the sector average is 7.92. The company's shares are currently trading 150.7% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for International Business Machines:
The 15 analysts following International Business Machines have set target prices ranging from $130.0 to $220.0 per share, for an average of $188.24 with a buy rating. The company is trading -10.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.
International Business Machines has an average amount of shares sold short because 2.5% of the company's shares are sold short. Institutions own 60.7% of the company's shares, and the insider ownership rate stands at 0.11%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $13,852,102,329.
