IBM
IBM
$223.65
+0.86%
International Business Machines (IBM) is a global technology company that provides software, IT consulting services, and hardware to help enterprise customers modernize their technology workflows. As one of the oldest and most established players in the industry, IBM serves 95% of Fortune 500 companies across 175 countries, leveraging its Red Hat, watsonx, and mainframe products to handle critical data workloads. The current investor narrative is dominated by a sharp post-earnings selloff after the company issued a profit warning citing a shift in enterprise AI spending from software to hardware, raising questions about near-term growth and the pace of its hybrid cloud and AI transformation.…
IBM
IBM
$223.65
Related headlines
IBM 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on IBM's 12-month outlook, with a consensus price target around $244.16 and implied upside of +9.2% versus the current price.
Average Target
$244.16
0 analysts
Implied Upside
+9.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$174 - $350
Analyst target range
IBM is covered by 23 analysts, with a consensus recommendation of 'Buy' (mean rating 2.12 on a 1-5 scale where 1 is Strong Buy). The average target price is $245.33, implying 14.5% upside from the current price of $214.19. The distribution shows a bullish tilt, with several firms maintaining Outperform or Buy ratings even after the recent drop. The target range is wide: low $174.00 and high $350.00. The high target of $350 assumes a successful AI transformation and multiple expansion, while the low target of $174 reflects worst-case scenarios of continued revenue deceleration and margin compression. Recent ratings actions include upgrades from JP Morgan (Neutral to Overweight) and a downgrade from HSBC (Hold to Reduce), indicating some divergence in opinion. The wide spread between low and high targets signals high uncertainty about IBM's near-term trajectory, but the average target still suggests that the selloff may be overdone.
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IBM Technical Analysis
IBM is in a pronounced downtrend, with the stock down 17.78% over the past year and currently trading at 64.4% of its 52-week range (close to the low of $199.19). The price sits at $214.19, well below the 52-week high of $332.46, indicating bearish momentum and a lack of buying interest. The 1-year relative strength versus the S&P 500 is -34.25%, underscoring significant underperformance. Short-term momentum is decisively negative: the 1-month price change is -18.55% and the 3-month change is -7.67%, with the 1-month relative strength at -19.33%. This divergence from the longer-term trend suggests a sharp acceleration of selling pressure, likely driven by the recent earnings disappointment. The stock has broken below its 200-day moving average and is testing the 52-week low area near $199. Support is at the 52-week low of $199.19; a breakdown below this level could signal further downside toward $174 (the low analyst target). Resistance is at the 52-week high of $332.46, but nearer-term resistance lies around $250. Beta is 0.675, meaning the stock is less volatile than the market, but the recent price action has been extreme, with a max drawdown of 37.5%.
Beta
0.68
0.68x market volatility
Max Drawdown
-37.5%
Largest decline past year
52-Week Range
$199-$332
Price range past year
Annual Return
-11.7%
Cumulative gain past year
| Period | IBM Return | S&P 500 |
|---|---|---|
| 1m | -21.9% | +0.2% |
| 3m | -3.7% | +3.7% |
| 6m | -27.1% | +8.0% |
| 1y | -11.7% | +18.2% |
| ytd | -23.3% | +9.6% |
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IBM Fundamental Analysis
IBM's revenue trajectory has been mixed: Q1 2026 revenue was $15.917 billion, up 9.5% year-over-year from Q1 2025's $14.541 billion, but Q2 2026 revenue data is missing (likely reflecting a miss). The company's software segment ($7.052B) and consulting ($5.272B) are the primary growth drivers, while infrastructure services ($3.326B) and financing ($0.22B) are smaller. The multi-quarter trend shows deceleration from Q4 2025's $19.686B (which included a large software deal) to Q1 2026's $15.917B, and the Q2 2026 miss suggests further softening. Profitability is solid: gross margin is 58.19% (Q1 2026: 56.23%), and net margin is 15.68% (TTM). Net income was $1.216B in Q1 2026, down from $2.194B in Q2 2025, but the company remains profitable. Operating margin was 18.50% in Q1 2026, slightly compressed from 18.18% in Q2 2025, indicating stable cost control. The balance sheet shows a debt-to-equity ratio of 2.06, which is elevated but manageable given strong free cash flow. TTM free cash flow is $14.584B, and the company generated $2.597B in operating cash flow in Q2 2026. ROE is 32.45%, reflecting efficient use of equity, but the current ratio of 0.93 suggests some liquidity tightness. The dividend yield is 2.27%, supported by a payout ratio of 59.05%.
Quarterly Revenue
$0.0B
2026-06
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
$14.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is IBM Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 26.07x, while the forward P/E is 16.21x, implying the market expects earnings growth to justify the current price. The gap between trailing and forward P/E suggests that earnings are expected to increase significantly, which is consistent with analyst estimates of $12.73 EPS for the current year. Compared to the industry (Information Technology Services), IBM's P/E of 26.07x is above the sector average of roughly 22x, a premium of about 18.5%. This premium may be justified by IBM's strong free cash flow generation and dividend yield, but it also reflects the market's skepticism about near-term growth. Historically, IBM's trailing P/E has ranged from 11x to 55x over the past five years. The current 26.07x is near the middle of that range, suggesting the stock is not excessively cheap or expensive relative to its own history. The P/S ratio of 4.09x is below the 5-year average of ~8x, indicating potential value, but this is partly due to the recent price decline.
PE
26.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 11x~47x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.1x
Enterprise Value Multiple
