International Business Machines Corporation (IBM) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+21.3%

$313.42

vs $258.33 price

Levered DCF

$333.16

After debt service

Piotroski score

5 / 9

Average

Altman Z-score

3.32

Safe zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	26.07×	33.66×	19.87×	77.41×	20.85×	20.04×	12.61×	11.88×
P/B	8.46×	7.54×	6.61×	5.8×	6.34×	5.44×	5.71×	6.17×
P/S	4.09×	3.28×	2.41×	2.1×	2.09×	2.03×	2.06×	1.3×
EV / EBITDA	19.07×	20.57×	13.33×	24.16×	13.56×	15.53×	12.25×	8.35×
Gross margin	58.2%	56.7%	55.4%	54.0%	54.9%	55.9%	54.6%	46.4%
Operating margin	18.5%	16.1%	15.9%	13.5%	12.0%	8.4%	13.1%	16.6%
Net margin	15.7%	9.6%	12.1%	2.7%	10.0%	10.1%	16.3%	11.0%
Current ratio	0.93×	1.04×	0.96×	0.92×	0.88×	0.98×	1.02×	1.29×
Debt / equity	2.06×	2.14×	2.66×	2.46×	2.92×	3.16×	3.27×	2.73×
Interest coverage	6.46×	5.88×	6.11×	6.72×	5.94×	3.62×	7.38×	19.27×
Dividend yield	2.3%	3.0%	4.1%	4.7%	4.9%	5.2%	4.8%	5.5%
Payout ratio	59.0%	102.1%	80.5%	362.7%	102.2%	103.7%	60.5%	64.9%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	32.4%	22.1%	33.3%	7.5%	30.4%	27.1%	45.3%	52.0%
Return on invested capital	10.4%	9.2%	7.8%	8.1%	6.3%	3.8%	6.0%	10.7%
Return on assets	7.0%	4.4%	5.5%	1.3%	4.3%	3.6%	6.2%	7.1%
Free cash flow yield	4.4%	5.7%	8.1%	6.7%	8.4%	13.4%	10.0%	10.9%
Earnings yield	3.8%	2.9%	5.0%	1.3%	4.8%	5.0%	7.9%	8.4%
Enterprise value	$329.7B	$250.5B	$195.9B	$173.3B	$168.2B	$163.9B	$178.9B	$138.1B
Net debt / EBITDA	3.1×	3.65×	3.19×	6.43×	3.91×	4.91×	4.11×	2.08×
Cash conversion cycle (days)	50	45	43	9	13	8	7	-5