International Business Machines Corp.
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+ FollowMarket Cap$240.19B
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Earnings Call Q3 2026
October 21, 2026 - AI Summary
Strong 3Q performance; growth broadly re-accelerated
- Revenue grew 6% (constant currency; “above base case” from July).
- Segment momentum: Software +9% (incl. Red Hat +11%; OpenShift ARR >30% growth), Infrastructure +5%, Consulting +2% (modest improvement).
- Software acceleration was organically driven, with the biggest pickup tied to transaction processing rebound after 2Q timing effects.
Profitability + cash flow momentum; productivity flywheel working
- Operating pre-tax margin expansion: +70 bps (and Adjusted EBITDA expansion: +60 bps).
- Diluted operating EPS: +11% growth.
- Free cash flow: about $8B through first 9 months, +8% YoY; 3Q productivity actions helped margin expansion while still funding growth.
- FCF outlook raised: > $1B of full-year free cash flow growth (primary driver: Adjusted EBITDA; partially offset by CapEx, cash taxes, net interest).
- Liquidity/shareholder returns: $11.1B cash; $4.8B dividends returned through first 9 months.
Full-year forecast reaffirmed at base-case revenue; software slightly guided up
- Revenue growth expectation (unchanged): 4%–5% for 2026.
- Software growth forecast raised/clarified: ~7% as revised base case; expected ~7%–8% full-year.
- Hybrid cloud: double-digit growth; Data: mid-teens growth; Automation: low double-digit growth.
- Transaction processing (TP): raised to ~flat for the full year (i.e., not expecting continued double-digit run-rate beyond normalization).
- Infrastructure: still low double-digit growth for full year, with distributed infrastructure a key tailwind.
- Consulting: low-to-mid single digit revenue growth expectation supported by GenAI backlog quality/momentum.
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$333.30
31.1% upside
Current Fair Value
31.1% upsideUndervalued by 31.1% based on the discounted cash flow analysis.
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Share Statistics
| Market cap | $240.19 Billion |
|---|---|
| Enterprise Value | $315.13 Billion |
| Annual dividend | $6.74 |
| Dividend yield | 2.61% |
| Earnings per Share | $11.36 |
| Beta | 0.72 |
| Outstanding Shares | 944,400,458 |
Return
| Return on Equity | 31.43% |
|---|---|
| Return on Assets | 7.21% |
| Return on Invested Capital | 10.49% |
Valuation & Multiples
| P/E Ratio | 21.66 |
|---|---|
| PEG | 84.91 |
| Price to Sales | 3.48 |
| Price to Book Ratio | 6.69 |
| Enterprise Value to Revenue | 4.51 |
| Enterprise Value to EBIT | 25.34 |
| Enterprise Value to Net Income | 28 |
| Total Debt to Enterprise | 0.27 |
| Debt to Equity | 2.37 |
Revenue Sources
No data
Last Earnings Call
Report Date
October 28, 2026
EPS Estimate
$2.83
Consensus analyst estimateRevenue Estimate
$16.83 B
Consensus analyst estimateNext Earnings Call
Expected Date
January 27, 2027
EPS Estimate
$4.63
Consensus analyst estimateRevenue Estimate
$20.40 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 12.30, the ratio is above 1, so institutions hold more puts than calls. That is a more cautious stance.
| Put/Call Ratio | 12.2956▲ 1133.80% |
|---|---|
| Total Calls | 36,200▼ 99.80% |
| Total Puts | 445,100▼ 97.44% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 3.58%▼ 62.43% |
|---|---|
| Total Invested | $7.40B▼ 95.75% |
| Investors Holding | 1,574▼ 2216.00% |
About International Business Machines Corp.
264,300 employees
CEO: Virginia Rometty
International Business Machines Corporation (IBM) delivers comprehensive solutions and services across the globe. Its operations are categorized into four primary divisions: Software, Consulting, Infrastructure, and Financing. The Softwa...