International Business Machines Corporation

NYSE:IBM Stock Report

Market Cap: US$285.7b

International Business Machines Valuation

Is IBM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Future Cash Flow Value

What is the Fair Price of IBM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

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Learn how to determine fair value like the best investors in the world.

Below Fair Value: IBM ($305.67) is trading above our estimate of fair value ($277.17)

Significantly Below Fair Value: IBM is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IBM?

Key metric: As IBM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for IBM. This is calculated by dividing IBM's market cap by their current earnings.
What is IBM's PE Ratio?
PE Ratio36.1x
EarningsUS$7.92b
Market CapUS$285.72b

Price to Earnings Ratio vs Peers

How does IBM's PE Ratio compare to its peers?

The above table shows the PE ratio for IBM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average23.2x
ACN Accenture
23.1x8.66%US$176.1b
CTSH Cognizant Technology Solutions
19.2x12.30%US$40.9b
IT Gartner
18.8x8.19%US$16.6b
EPAM EPAM Systems
31.6x14.29%US$11.7b
IBM International Business Machines
36.1x8.93%US$285.7b

Price-To-Earnings vs Peers: IBM is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the peer average (23.2x).

Historical Price to Earnings Ratio

Historical Price to Earnings Ratio compares a stock's price to its earnings over time. Higher ratios indicate that investors are willing to pay more for the stock.

Fetching historical data

Price to Earnings Ratio vs Industry

How does IBM's PE Ratio compare vs other companies in the US IT Industry?

5 CompaniesPrice / EarningsEstimated GrowthMarket Cap
MASK 3 E Network Technology Group
4.4xn/aUS$6.56m
GTCH GBT Technologies
0.3xn/aUS$1.85m
MCOM Micromobility.com
0.5xn/aUS$1.29m
GMTH GMTech
2.7xn/aUS$1.19m
IBM 36.1xIndustry Avg. 28.9xNo. of Companies8PE020406080100+
5 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: IBM is expensive based on its Price-To-Earnings Ratio (36.1x) compared to the US IT industry average (28.9x).

Price to Earnings Ratio vs Fair Ratio

What is IBM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IBM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio36.1x
Fair PE Ratio38.2x

Price-To-Earnings vs Fair Ratio: IBM is good value based on its Price-To-Earnings Ratio (36.1x) compared to the estimated Fair Price-To-Earnings Ratio (38.2x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst IBM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$305.67
US$302.05
-1.18%
16.77%US$375.00US$198.00n/a19
Jan ’27US$296.21
US$293.89
-0.78%
15.19%US$360.00US$198.00n/a19
Dec ’26US$305.67
US$290.89
-4.84%
15.41%US$360.00US$198.00n/a18
Nov ’26US$307.41
US$287.09
-6.61%
15.35%US$350.00US$198.00n/a18
Oct ’26US$286.49
US$281.25
-1.83%
15.39%US$350.00US$198.00n/a19
Sep ’26US$243.49
US$281.32
+15.53%
15.81%US$350.00US$198.00n/a18
Aug ’26US$250.05
US$281.77
+12.69%
15.38%US$350.00US$198.00n/a19
Jul ’26US$291.20
US$260.02
-10.71%
16.35%US$325.00US$170.00n/a20
Jun ’26US$259.06
US$252.27
-2.62%
13.62%US$300.00US$170.00n/a20
May ’26US$239.66
US$251.82
+5.07%
13.50%US$300.00US$170.00n/a20
Apr ’26US$250.34
US$255.70
+2.14%
15.54%US$320.00US$160.00n/a19
Mar ’26US$252.44
US$254.51
+0.82%
15.77%US$320.00US$160.00n/a19
Feb ’26US$255.70
US$239.09
-6.50%
18.24%US$290.00US$144.10n/a17
Jan ’26US$219.83
US$217.12
-1.23%
18.12%US$260.00US$139.00US$296.2117
Dec ’25US$227.41
US$214.21
-5.81%
18.32%US$260.00US$139.00US$305.6718
Nov ’25US$208.25
US$214.21
+2.86%
18.32%US$260.00US$139.00US$307.4118
Oct ’25US$219.35
US$196.74
-10.31%
15.14%US$250.00US$139.00US$286.4918
Sep ’25US$202.13
US$188.49
-6.75%
13.69%US$222.00US$130.00US$243.4919
Aug ’25US$189.66
US$186.39
-1.73%
14.24%US$222.00US$130.00US$250.0519
Jul ’25US$175.10
US$179.83
+2.70%
13.44%US$215.00US$130.00US$291.2019
Jun ’25US$166.85
US$180.23
+8.02%
13.95%US$215.00US$130.00US$259.0618
May ’25US$164.43
US$183.29
+11.47%
12.91%US$215.00US$130.00US$239.6618
Apr ’25US$189.83
US$185.93
-2.05%
15.64%US$224.00US$125.00US$250.3418
Mar ’25US$188.20
US$180.93
-3.86%
15.25%US$224.00US$125.00US$252.4419
Feb ’25US$186.90
US$178.51
-4.49%
16.31%US$224.00US$125.00US$255.7019
Jan ’25US$163.55
US$151.59
-7.31%
14.88%US$210.00US$110.00US$219.8317
US$302.05
Fair Value
1.2% overvalued intrinsic discount
19
Number of Analysts

Analyst Forecast: Target price is lower than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2026/01/18 17:16
End of Day Share Price 2026/01/16 00:00
Earnings2025/09/30
Annual Earnings2024/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

International Business Machines Corporation is covered by 54 analysts. 20 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
James KelleherArgus Research Company
Benjamin ReitzesBarclays
Josep BoriBerenberg