International Business Machines Corp.

International Business Machines Corp.

IBM

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Market Cap$210.71B
Close$

Compare to Similar Companies

P/E RatioDividendsReturn on EquityPrice-to-SalesDebt-to-Equity
International Business Machines Corp.International Business Machines Corp.19.53.01%31%3.12.4

Earnings Call Q2 2026

July 22, 2026 - AI Summary

Core results & what disappointed (Q2 “miss”): - IBM delivered +1% revenue growth in Q2 2026, with 30 bps operating pretax margin expansion and +5% diluted operating EPS growth. - The quarter fell short of expectations due mainly to CapEx-sensitive large deals slipping, not broad demand collapse (Jim said tens of large deals failed to close on expected timelines in late June). - Software mix impact: transaction processing revenue -9%, while data +18% and automation +3% (shift driven by clients prioritizing other infrastructure CapEx ahead of price/supply constraints).
Most important guidance / forecasts (full-year): - Reconfirmed outlook: FY 2026 revenue growth: +4% to +5% (constant currency) (vs prior higher expectations; bottom end is a “base case”). - Software growth raised/updated to +6% to +8% for FY (Jim: assumes recent spending dynamics persist at the low end; more typical conversion at the high end). - Infrastructure: low single-digit growth expected for FY, driven by Distributed Infrastructure + strong IBM Z program-to-program performance. - Free cash flow: IBM maintains plan to grow free cash flow by ~$1B in 2026; management emphasized maintaining free-cash-flow realization and margin discipline.
Why management thinks demand is “deferred, not destroyed” (surprising but key): - IBM’s view is that the slip was timing-related because the deals are enterprise license agreements (ELAs) typically treated as capital investments—so when clients reallocate CapEx, transaction-heavy ELA revenue timing shifts. - 1/3 of the “slipped” large CapEx deals already closed in the first few weeks of Q3 (management cited this as evidence of deferral, not permanent loss). - Underlying demand signals: IBM highlighted healthy recurring software (about 80% of software revenue is recurring) and strong consumption/subscription performance.

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$269.29

Target Price by Analysts

19% upsideInternational Business Machines Target Price DetailsTarget Price
$400.93

Current Fair Value

77.2% upside

Undervalued by 77.2% based on the discounted cash flow analysis.

Share Statistics

Market cap$210.71 Billion
Enterprise Value$286.99 Billion
Dividend Yield$6.73 (3.01%)
Earnings per Share$11.36
Beta0.68
Outstanding Shares939,900,000

Return

Return on Equity31.13%ROE
Return on Assets7.05%
Return on Invested Capital10.65%

Valuation & Multiples

P/E Ratio19.53P/E Ratio
PEG-1477.75PEG
Price to Sales3.1Price to Sales
Price to Book Ratio6.29Price to Book Ratio
Enterprise Value to Revenue4.15
Enterprise Value to EBIT23.2
Enterprise Value to Net Income26
Total Debt to Enterprise0.29
Debt to Equity2.42Debt to Equity

Revenue Sources

No data

Insider Trades

Last Earnings Call

Report Date
July 22, 2026
EPS Estimate
$2.93
Average shareholder expectation
Revenue Estimate
$17.46 B
Average shareholder expectation

Next Earnings Call

Expected Date
October 21, 2026
EPS Estimate
$2.90
Average shareholder expectation
Revenue Estimate
$16.84 B
Average shareholder expectation

Institutional Put/Call Ratio

Market sentiment based on institutional option activity.

Put/Call Ratio1.0117▲ 4.50%
Total Calls615,000▼ 94.42%
Total Puts622,200▼ 94.16%

Institutional Ownership

Holdings and activity of institutional investors.

Ownership %4.25%▼ 58.92%
Total Invested$11.15B▼ 92.23%
Investors Holding1,837▼ 1743.00%

ESG Score

No data

About International Business Machines Corp.

CEO: Virginia Rometty

Relevant Senate Committees

Joint Committee on Taxation

Its technical expertise and official scoring of tax legislation directly influence corporate tax structures, capital investment credits, and the overall tax burden on a global company like IBM.

Finance

Directly controls tax policy and international trade, which are paramount for a global corporation like IBM, significantly influencing its profitability and operational costs.

Appropriations

Directly controls the allocation of federal funds, which dictates the budget for government IT contracts, defense programs, and scientific research, significantly impacting IBM's public sector revenue.

Judiciary

Directly oversees antitrust and intellectual property laws, which are crucial for IBM's business model, M&A strategy, and competitive landscape in the tech industry.

Armed Services

IBM is a major technology provider to the Department of Defense, making its funding authorizations and R&D directives highly relevant to IBM's government business.

Banking, Housing, and Urban Affairs

Directly regulates the financial sector, a major client base for IBM's consulting, cloud, and AI solutions, and impacts emerging areas like cryptocurrency where IBM has interests.

Select Committee on Intelligence

IBM provides significant cybersecurity, AI, and advanced technology solutions to government and intelligence agencies, making insights on global threats highly relevant.

Commerce, Science, and Transportation

Directly regulates areas critical to IBM's business, including data privacy, internet commerce, telecommunications, and emerging AI technologies.

Homeland Security and Governmental Affairs

Directly influences government contracts for IT, cloud, and AI services, a significant market for IBM. Also impacts AI regulation which is core to IBM's strategy.