Upside case
Bull case
$217-5.1%
The bull case prices IBM at 17x on FY1 earnings, assuming continued execution and no meaningful deceleration in the core business.
Analysis OverviewHoldUpdated May 1, 2026
International Business Machines Corporation (IBM) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
50
analysts
22 bullish · 4 bearish · 50 covering IBM
Strong Buy
1
Buy
21
Hold
24
Sell
4
Strong Sell
0
Consensus Target
$310
+35.2% vs today
Scenario Range
$78 – $217
Model bear to bull value window
Coverage
50
Published analyst ratings
Valuation Context
18.4x
Forward P/E · Market cap $214.8B
IBM price targets
Three scenarios for where IBM stock could go
Current
~$229
Confidence
66 / 100
Updated
May 1, 2026
Where we are now
Current · $229
Bear
$78
Base
$265
Bull
$217
Market caseClosest to today
Base case
$265+15.7%
At 21x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$78-66.1%
If investor confidence fades or macro conditions deteriorate, a 12x multiple contraction could push IBM down roughly 66% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
International Business Machines Corporation
IBM · NYSETechnologyInformation Technology ServicesDecember year-end
International Business Machines Corporation is a global technology company that provides integrated enterprise solutions and services. It generates revenue primarily through software (~30%), consulting (~30%), and infrastructure (~25%) segments, with financing making up the remainder. IBM's key competitive advantage lies in its deep enterprise relationships, hybrid cloud expertise—particularly through its Red Hat acquisition—and legacy mainframe business that creates significant switching costs for large corporate clients.
Market Cap
$214.8B
Revenue TTM
$68.9B
Net Income TTM
$10.8B
Net Margin
15.6%
IBM Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
+6.2%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$2.80/$2.65
Revenue
$17.0B/$16.6B
Q4 2025
EPS
$2.65/$2.45
Revenue
$16.3B/$16.1B
Q1 2026
EPS
$4.52/$4.31
Revenue
$19.7B/$19.2B
Q2 2026
EPS
$1.91/$1.81
Revenue
$15.9B/$15.6B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $2.80/$2.65 | +5.7% | $17.0B/$16.6B | +2.3% |
| Q4 2025 | $2.65/$2.45 | +8.2% | $16.3B/$16.1B | +1.5% |
| Q1 2026 | $4.52/$4.31 | +4.9% | $19.7B/$19.2B | +2.6% |
| Q2 2026 | $1.91/$1.81 | +5.5% | $15.9B/$15.6B | +1.8% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$72.3B
+4.9% YoY
FY2
$76.3B
+5.5% YoY
EPS Outlook
FY1
$12.22
+8.2% YoY
FY2
$12.93
+5.8% YoY
Trailing FCF (TTM)$13.1B
FCF Margin: 19.0%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
IBM beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
IBM Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $67.5B
Product Mix
Latest annual revenue by segment or product family
Software
44.4%
+10.6% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
Americas
49.4%
+6.6% YoY
Tap, hover, or focus a slice to inspect segment detail.
Software is the largest disclosed segment at 44.4% of FY 2025 revenue, up 10.6% YoY.
Americas is the largest reported region at 49.4%, up 6.6% YoY.
IBM Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Overvalued
Fair value est. $216 — implies -7.0% from today's price.
Premium to Fair Value
7.0%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
IBM
20.5x
vs
S&P 500
25.1x
18% discount
vs Technology Trailing P/E
IBM
20.5x
vs
Technology
26.7x
23% discount
vs IBM 5Y Avg P/E
Today
20.5x
vs
5Y Average
36.0x
43% discount
Forward PE
18.4x
S&P 500
19.1x
-3%
Technology
22.1x
-17%
5Y Avg
—
—
Trailing PE
20.5x
S&P 500
25.1x
-18%
Technology
26.7x
-23%
5Y Avg
36.0x
-43%
PEG Ratio
1.66x
S&P 500
1.72x
-4%
Technology
1.52x
+9%
5Y Avg
—
—
EV/EBITDA
17.5x
S&P 500
15.2x
+15%
Technology
17.5x
+0%
5Y Avg
15.8x
+11%
Price/FCF
18.6x
S&P 500
21.1x
-12%
Technology
19.5x
-5%
5Y Avg
16.3x
+14%
Price/Sales
3.2x
S&P 500
3.1x
+2%
Technology
2.4x
+30%
5Y Avg
2.8x
+13%
Dividend Yield
2.88%
S&P 500
1.87%
+54%
Technology
1.16%
+149%
5Y Avg
3.74%
-23%
| Metric | IBM | S&P 500 | Technology | 5Y Avg IBM |
|---|---|---|---|---|
| Forward PE | 18.4x | 19.1x | 22.1x-17% | — |
| Trailing PE | 20.5x | 25.1x-18% | 26.7x-23% | 36.0x-43% |
| PEG Ratio | 1.66x | 1.72x | 1.52x | — |
| EV/EBITDA | 17.5x | 15.2x+15% | 17.5x | 15.8x+11% |
| Price/FCF | 18.6x | 21.1x-12% | 19.5x | 16.3x+14% |
| Price/Sales | 3.2x | 3.1x | 2.4x+30% | 2.8x+13% |
| Dividend Yield | 2.88% | 1.87% | 1.16% | 3.74% |
IBM trades above S&P 500 benchmarks on 1 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolIBM Financial Health
Verdict
Strong
IBM generates $13.1B in free cash flow at a 19.0% margin — returns 2.9% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$68.9B
Revenue Growth
TTM vs prior year
+9.7%
Gross Margin
Gross profit as a share of revenue
59.0%
Operating Margin
Operating income divided by revenue
16.4%
Net Margin
Net income divided by revenue
15.6%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$11.29
Free Cash Flow (TTM)
Cash generation after capex
$13.1B
FCF Margin
FCF as share of revenue — the primary cash quality signal
19.0%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
9.8%
ROA
Return on assets, trailing twelve months
7.1%
Cash & Equivalents
Liquid assets on the balance sheet
$13.6B
Net Debt
Total debt minus cash
$53.5B
Debt Serviceability
Net debt as a multiple of annual free cash flow
4.1× FCF
~4.1 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
35.4%
* Elevated by buyback-compressed equity — compare ROIC (9.8%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.9%
Dividend
2.9%
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
$6.59
Payout Ratio
Share of earnings distributed as dividends
59.0%
Shares Outstanding
Current diluted share count
938M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageIBM Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Economic & Market Conditions
A global economic downturn or reduced client spending can cut IBM’s revenue and profits, as seen during past “Growth & Demand Scare” events that triggered significant stock declines. Market liquidity shifts and rising customer credit risk on receivables further threaten cash flow.
Medium
Technological Disruption & AI
IBM’s heavy AI investment risks cannibalizing legacy products; AI-related bookings are concentrated in lower‑margin consulting, making it unclear if top‑line or margin expansion will materialize. A failure to capture AI market share could erode long‑term profitability.
Medium
Cybersecurity & Data Privacy
Securing digital assets against cyberattacks remains a critical risk; a breach could expose sensitive client data and trigger regulatory penalties. The potential for reputational damage and legal costs could materially impact earnings.
Medium
Regulatory & Compliance
Operating in 175+ countries exposes IBM to evolving rules; non‑compliance, especially in third‑party risk management, can lead to fines and operational restrictions. Legal and financial consequences could materially affect the company’s financial condition.
Medium
Financial Risks
Currency fluctuations, financing costs, and market volatility affecting pension assets pose financial exposure. Adverse movements could increase borrowing costs or erode pension fund valuations, impacting net income.
Medium
Acquisitions & Integration
IBM’s acquisition strategy carries the risk of goodwill impairment and integration challenges. Failure to realize synergies or manage intangible asset write‑downs could negatively affect earnings.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why IBM Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Hybrid Cloud & AI Leadership
IBM is positioning itself as a key player in the hybrid cloud and AI market, with its watsonx platform driving enterprise AI adoption. The company reported that its generative AI business surpassed $12.5 billion in revenue in early 2026, indicating strong enterprise demand beyond pilot phases. This focus on AI is seen as a significant growth driver, with analysts noting IBM’s ability to benefit from AI demand without massive capital expenditure on infrastructure.
High-Margin Software Segment
Software is IBM’s highest‑margin segment, contributing over $30 billion annually. This includes its Hybrid Platform (Red Hat) and Data & AI (watsonx) offerings. The company’s strategic shift toward high‑margin, recurring software revenue is a positive factor.
Quantum Computing Potential
IBM is making significant advancements in quantum computing, with a roadmap focused on computational quality, scalability, and modularization. The company aims to deliver usable quantum machines capable of addressing meaningful problems and building a scalable modular framework for future supercomputers.
Strong Financial Performance
IBM’s Q4 2025 revenue reached $19.7 billion, up 12% year‑over‑year, and full‑year 2025 revenue was $67.5 billion, up 7.62% from the previous year. Net income in Q4 2025 was $5.60 billion, up 92.2% year‑over‑year, and free cash flow for full‑year 2025 was $14.7 billion.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
IBM Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$229.03
52W Range Position
8%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$220.72
+3.8% from the low
52-Week High
$324.90
-29.5% from the high
1 Month
-7.18%
3 Month
-20.99%
YTD
-21.4%
1 Year
-8.1%
3Y CAGR
+22.8%
5Y CAGR
+10.5%
10Y CAGR
+5.1%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
IBM vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
18.4x
vs 12.5x median
+48% above peer median
Revenue Growth
+4.9%
vs +4.7% median
+5% above peer median
Net Margin
15.6%
vs 10.4% median
+50% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
IBM IBM International Business Machines Corporation | $214.8B | 18.4x | +4.9% | 15.6% | Hold | +35.2% |
ACN ACN Accenture plc | $111.5B | 12.9x | +4.7% | 10.7% | Buy | +67.5% |
HPE HPE Hewlett Packard Enterprise Company | $39.9B | 12.5x | +11.7% | -0.4% | Hold | -4.4% |
DXC DXC DXC Technology Company | $2.0B | 3.7x | -5.7% | 3.3% | Hold | +9.6% |
CTS CTSH Cognizant Technology Solutions Corporation | $24.6B | 9.1x | +4.8% | 10.4% | Hold | +60.7% |
INF INFY Infosys Limited | $50.5B | 16.4x | +1.4% | 16.2% | Hold | +35.6% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
IBM Dividend and Capital Return
IBM returns 2.9% total yield, led by a 2.88% dividend, raised 30 consecutive years.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
2.9%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
2.88%
Payout Ratio
59.0%
How IBM Splits Its Return
Div 2.88%
Dividend 2.88%Buybacks 0.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$6.59
Growth Streak
Consecutive years of dividend increases
30Y
3Y Div CAGR
0.6%
5Y Div CAGR
1.5%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
938M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $3.37 | — | — | — |
| 2025 | $6.71 | +0.6% | 0.0% | 2.2% |
| 2024 | $6.67 | +0.6% | 0.0% | 3.0% |
| 2023 | $6.63 | +0.6% | 0.3% | 4.3% |
| 2022 | $6.59 | +4.0% | 0.3% | 4.9% |
FAQ
7 questionsIBM Investor Questions
Common questions answered from live analyst data and company financials.
01Is International Business Machines Corporation (IBM) stock a buy or sell in 2026?
International Business Machines Corporation (IBM) is rated Hold by Wall Street analysts as of 2026. Of 50 analysts covering the stock, 22 rate it Buy or Strong Buy, 24 rate it Hold, and 4 rate it Sell or Strong Sell. The consensus 12-month price target is $310, implying +35.2% from the current price of $229. The bear case scenario is $78 and the bull case is $217.
02What is the IBM stock price target for 2026?
The Wall Street consensus price target for IBM is $310 based on 50 analyst estimates. The high-end target is $360 (+57.2% from today), and the low-end target is $225 (-1.8%). The base case model target is $265.
03Is International Business Machines Corporation (IBM) stock overvalued in 2026?
IBM trades at 18.4x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals slightly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for International Business Machines Corporation (IBM) stock in 2026?
The primary risks for IBM in 2026 are: (1) Economic & Market Conditions — A global economic downturn or reduced client spending can cut IBM’s revenue and profits, as seen during past “Growth & Demand Scare” events that triggered significant stock declines. (2) Technological Disruption & AI — IBM’s heavy AI investment risks cannibalizing legacy products; AI-related bookings are concentrated in lower‑margin consulting, making it unclear if top‑line or margin expansion will materialize. (3) Cybersecurity & Data Privacy — Securing digital assets against cyberattacks remains a critical risk; a breach could expose sensitive client data and trigger regulatory penalties. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is International Business Machines Corporation's revenue and earnings forecast?
Analyst consensus estimates IBM will report consensus revenue of $72.3B (+4.9% year-over-year) and EPS of $12.22 (+8.2% year-over-year) for the upcoming fiscal year. The following year, analysts project $76.3B in revenue.
06When does International Business Machines Corporation (IBM) report its next earnings?
A confirmed upcoming earnings date for IBM is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does International Business Machines Corporation generate?
International Business Machines Corporation (IBM) generated $13.1B in free cash flow over the trailing twelve months — a free cash flow margin of 19.0%. IBM returns capital to shareholders through dividends (2.9% yield) and share repurchases ($0 TTM).