IBM
IBM · Information Technology · IT Consulting & Other Services
$231.04
52w 199.19 – 332.46
20y monthly, adjusted
Mkt cap
$217.7B
P/E
21.0
P/FCF
18.3
FCF yield
5.5%
ROE
32.4%
Shldr yield
2.8%
div 2.8% + bb 0.0%
What today's price assumes
At $217.7B, the market is pricing in 6.5% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew -1.2% per year — the price asks for acceleration beyond the historical record.
Simple DCF per-share range: $134 · $134 · $167 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 6.3× across 19 years, IBM would trade near $88/share (25th–75th percentile: $74–$104); it trades at 16.5× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+3.7%
Rev 5y
+4.1%
Rev 10y
−1.9%
EPS 5y
+12.4%
EPS 10y
−1.8%
FCF 5y
−4.9%
FCF 10y
−1.2%
Fundamentals
Fiscal 2007–2025, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q2'26 | $17.2B | +1.1% | $2.2B | −1.3% | 2.27 | $2.6B |
| Q1'26 | $15.9B | +9.5% | $1.2B | +15.3% | 1.28 | $5.2B |
| Q4'25 * | $19.7B | +12.2% | $5.6B | +92.2% | 5.90 | $4.0B |
| Q3'25 | $16.3B | +9.1% | $1.7B | — | 1.84 | $3.1B |
| Q2'25 | $17.0B | +7.7% | $2.2B | +19.6% | 2.31 | $1.7B |
| Q1'25 | $14.5B | +0.5% | $1.1B | −34.3% | 1.12 | $4.4B |
| Q4'24 * | $17.6B | +1.0% | $2.9B | −11.4% | 3.11 | $4.3B |
| Q3'24 | $15.0B | +1.5% | −$330.0M | −119.4% | -0.36 | $2.9B |
| Q2'24 | $15.8B | +1.9% | $1.8B | +15.9% | 1.96 | $2.1B |
| Q1'24 | $14.5B | +1.5% | $1.6B | +73.1% | 1.72 | $4.2B |
| Q4'23 * | $17.4B | +4.1% | $3.3B | +21.3% | 3.57 | $4.5B |
| Q3'23 | $14.8B | +4.6% | $1.7B | — | 1.84 | $3.1B |
| Q2'23 | $15.5B | −0.4% | $1.6B | +13.7% | 1.72 | $2.6B |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +3.7% | +4.1% | −1.9% | −2.6% |
| Operating cash flow | +8.1% | −6.2% | −2.6% | −2.6% |
| Free cash flow | +10.0% | −4.9% | −1.2% | −1.6% |
| EPS (diluted) | +83.8% | +12.4% | −1.8% | −0.2% |
| Equity | +14.2% | +9.7% | +8.6% | +2.3% |
| LT debt | +5.9% | +0.2% | +5.1% | +6.3% |
| Diluted shares | +1.3% | +1.1% | −0.4% | −2.0% |
| Stock price | +19.7% | +15.7% | +8.6% | +6.0% |
$100, 3 years ago
$171vs $176 in SPY
19.7% vs 20.7%/yr
$100, 5 years ago
$207vs $181 in SPY
15.7% vs 12.6%/yr
$100, 10 years ago
$229vs $412 in SPY
8.6% vs 15.2%/yr
$100, 15 years ago
$240vs $813 in SPY
6.0% vs 15.0%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$165.40
$205.3B created / $1.2B retained
Last 10 years
$14.41
$211.5B created / $14.7B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
15.1%
OCF ÷ (equity + debt)
OCF / EV yield
5.0%
MC vs 10× OCF
1.68
≤1 = priced under 10× OCF
Debt / FCF
4.5y
SBC / FCF
14.2%
Owner earnings
$10.4B
OCF − capex − SBC
OE yield
4.7%
Share count 5y
−2.4%
per year; negative = buybacks
Capital intensity
—
net PP&E ÷ revenue
Sales efficiency
—
new PP&E per $1 new revenue, 5y
Growth engine (5y): reinvested 19.2% of operating cash flow at an incremental return of -40.8% — an organically fundable growth rate of about -7.8% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
16 of 25 checks pass · 64%. Checks with structurally missing inputs are excluded.
Growth & Consistency
3/7
- fail
Revenue growth
4.1% · 5y CAGR ≥ 5%
- pass
EPS growth
12.4% · 5y CAGR ≥ 5%
- fail
FCF growth
-4.9% · 5y CAGR ≥ 5%
- fail
Revenue rises consistently
6 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
- pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
- fail
Cash flow keeps up with sales
-6.2% vs 4.1% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
6/6
- pass
Net margin
15.7% · ≥ 8%
- na
Operating margin
— · ≥ 10%
- pass
Gross margin stable or rising
58.2% vs 54.0% · no drop > 2 pts over 3y
- pass
Return on equity
32.4% · ≥ 12%
- pass
Cash ROIC
15.1% · ≥ 12%
- pass
FCF margin
17.9% · ≥ 5%
- pass
Earnings back their cash
OCF $13.2B vs NI $10.6B · OCF ≥ net income (latest FY)
Balance Sheet
1/4
- fail
Debt payable from cash flow
4.5y · LT debt ≤ 3× FCF
- fail
Cash cushion
25% · cash ≥ 50% of LT debt
- fail
Leverage
1.68 · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$32.6B · equity > 0 and grew over ~5y
- na
Interest burden
— · interest ≤ 15% of operating income
Capital Allocation
3/4
- pass
Share count flat or shrinking
-2.4% · ≤ +0.5%/yr over ~5y
- pass
Stock comp restrained
14% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
52% · dividends + buybacks ≤ 100% of FCF
- fail
Repurchases are a habit
4 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
3/4
- pass
FCF yield
5.5% · ≥ 3%
- pass
Earnings multiple
21.0 · P/E ≤ 25
- fail
Price asks less than history delivered
6.5% vs -1.2% · implied FCF growth ≤ historical FCF CAGR
- pass
Shareholder yield
2.8% · dividends + buybacks ≥ 2% of market cap
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 67,535 | 39,297 | — | 10,593 | 11.17 | 13,193 | 1,091 | 12,102 | 6,255 | — | 1,715 | 13,587 | 54,836 | 32,648 | 949 |
| 2024 | 62,753 | 35,551 | — | 6,023 | 6.43 | 13,445 | 1,048 | 12,397 | 6,147 | — | 1,311 | 13,947 | 49,884 | 27,307 | 937 |
| 2023 | 61,860 | 34,300 | — | 7,502 | 8.14 | 13,931 | 1,245 | 12,686 | 6,040 | — | 1,133 | 13,068 | 50,121 | 22,533 | 922 |
| 2022 | 60,530 | 32,687 | — | 1,639 | 1.80 | 10,435 | 1,346 | 9,089 | 5,948 | — | 987 | 7,886 | 46,189 | 21,944 | 912 |
| 2021 | 57,350 | 31,486 | — | 5,743 | 6.35 | 12,796 | 2,062 | 10,734 | 5,869 | — | 982 | 6,650 | 44,917 | 18,901 | 905 |
| 2020 | 55,179 | 30,865 | — | 5,590 | 6.23 | 18,197 | 2,618 | 15,579 | 5,797 | — | 937 | 13,188 | 54,217 | 20,597 | 897 |
| 2019 | 57,714 | 31,533 | — | 9,431 | 10.56 | 14,770 | 2,286 | 12,484 | 5,707 | 1,361 | 679 | 8,172 | 54,102 | 20,841 | 893 |
| 2018 | 79,591 | 36,936 | — | 8,728 | 9.52 | 15,247 | 3,395 | 11,852 | 5,666 | 4,443 | 510 | 11,379 | 35,605 | 16,796 | 916 |
| 2017 | 79,139 | 36,943 | — | 5,753 | 6.14 | 16,724 | 3,229 | 13,495 | 5,506 | 4,340 | 534 | 11,972 | 39,837 | 17,594 | 937 |
| 2016 | 79,919 | 38,516 | — | 11,872 | 12.38 | 17,084 | 3,567 | 13,517 | 5,256 | 3,502 | 544 | 7,826 | 34,655 | 18,246 | 959 |
| 2015 | 81,741 | 40,684 | — | 13,190 | 13.42 | 17,255 | 3,579 | 13,676 | 4,897 | 4,609 | 468 | 7,686 | 33,428 | 14,262 | 983 |
| 2014 | 92,793 | 46,407 | — | 12,022 | 11.90 | 16,868 | 3,740 | 13,128 | 4,265 | 13,679 | 512 | 8,476 | 34,991 | 11,868 | 1,010 |
| 2013 | 98,367 | 48,684 | — | 16,483 | 14.94 | 17,485 | 3,623 | 13,862 | 4,058 | 13,859 | 614 | 10,716 | 32,856 | 22,792 | 1,103 |
| 2012 | 102,874 | 50,361 | — | 16,604 | 14.37 | 19,586 | 4,082 | 15,504 | 3,773 | 11,995 | 688 | 10,412 | 24,088 | 18,860 | 1,155 |
| 2011 | 106,916 | 50,138 | — | 15,855 | 13.06 | 19,846 | 4,108 | 15,738 | 3,473 | 15,046 | 697 | 11,922 | 22,857 | 20,138 | 1,214 |
| 2010 | 99,870 | 46,014 | — | 14,833 | 11.52 | 19,549 | 4,185 | 15,364 | 3,177 | 15,375 | 629 | 10,661 | 21,846 | 23,046 | 1,287 |
| 2009 | 95,758 | 43,785 | — | 13,425 | 10.01 | 20,773 | 3,447 | 17,326 | 2,860 | 7,429 | 558 | 12,183 | 24,154 | 22,637 | 1,341 |
| 2008 | 103,630 | 45,661 | — | 12,334 | 8.89 | 18,812 | 4,171 | 14,641 | 2,585 | 10,578 | 659 | 12,741 | 22,689 | 13,465 | 1,388 |
| 2007 | 98,786 | 41,729 | — | 10,418 | 7.15 | 16,094 | 4,630 | 11,464 | 2,147 | 18,828 | 713 | 14,991 | — | 28,615 | 1,457 |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.