INTERNATIONAL BUSINESS MACHINES CORP

IBM

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers hybrid cloud and AI platforms that allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.

About the company

Country: United StatesPrice: $219.99Market Cap: $207.3B

Investment snapshot

13%positive consensus

Scored 37d ago

Positive

BUY / PASS

Neutral / negative

4 / 9

NEUTRAL / FAIL

Median fair value

$128.70

-41.5% vs price

Models with upside

1 / 16

Positive margin of safety

Key risk

All 8 investors flag IBM's efficiency

Framework analysis

Verdict	Meaning
BUY	Positive purchase signal: the framework's buy requirements are met.
PASS	The company clears the framework's checklist or screen, but the framework does not produce a buy signal. For valuation frameworks this often means margin of safety is missing, insufficient, or unavailable; some screen-only frameworks have no intrinsic-value BUY state.
NEUTRAL	Neither a positive nor negative conclusion. It does not mean to hold an existing position.
FAIL	The company does not clear the framework's requirements.
Ranked	Ranked strategies do not use PASS: selected cohort is BUY, outside the cohort is FAIL, and unranked is NEUTRAL.

Scored from 10-K37d ago

Metric	O'Shaughnessy Systematic Factor Composite	Munger Quality Focus	Marks Risk-Aware Value	Buffett Quality Compounder	Lynch GARP	Pabrai Dhandho Framework	Akre Three-Legged Stool	Schloss Asset-Value Discipline	Neff Low-P/E Total Return	Sleep Scale Economies Shared	Templeton Global Bargain Hunter	Ackman Activist Value	Dreman Contrarian Value	Piotroski F-Score	Greenblatt Magic Formula	Graham Defensive Value
Verdict	NEUTRAL	PASS	FAIL	FAIL	FAIL	FAIL	FAIL	FAIL	NEUTRAL	FAIL	PASS	NEUTRAL	FAIL	NEUTRAL	Not ranked	FAIL
Score
Analysis
Intrinsic Value	N/A			N/A		N/A		N/A	N/A	N/A				N/A
Margin of Safety	N/A	-58.4%	-86.3%	N/A	-59.0%	N/A	+41.4%	N/A	N/A	N/A	-116.4%	-22.8%	-70.9%	N/A	-160.5%	-135.2%
Data As Of	10-K (2026-08-25)	10-K (2026-08-25)	10-K (2026-08-25)	10-K (2026-08-25)	10-K (2026-08-25)	10-K (2026-08-25)	10-K (2026-08-25)	10-K (2026-08-24)	10-K (2026-08-24)	10-K (2026-08-23)	10-K (2026-08-23)	10-K (2026-08-23)	10-K (2026-08-23)	10-K (2026-08-23)	10-K (2026-08-23)	10-K (2026-08-23)

Where It Passes

Where It Falls Short

Efficiency0% pass✗ 11▾
All 8 investors flag IBM's efficiency
Return on Invested Capital
✗Munger> 15%
ROIC (3-5 yr avg)
✗Buffett> 10%
ROIC - WACC
✗BuffettPositive (WACC = 10%)
ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable
✗AkreLatest 3 consecutive FYs: ROIC > 15% in each
Reinvestment Rate x ROIC
✗AkreReinvestment Rate * ROIC > 10%
ROIC (5-year)
✗SleepROIC > 12% in a majority of years
Current Assets / Current Liabilities0.96
✗Dreman> 1.5
Current Ratio Change YoY1.04 -> 0.96
✗PiotroskiIncreased YoY
Revenue / Total Assets Change YoY0.46x -> 0.44x
✗PiotroskiImproved YoY
EBIT / (NWC + Net Fixed Assets)N/A (invested capital <= 0)
✗Greenblatt> 25%
Current Ratio0.96
✗Graham>= 2.0
Debt & Leverage9% pass✓ 1✗ 13▾
10 of 11 flag IBM's debt & leverage — Munger, Marks, Buffett +7 more
Debt Levels1.88
✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3
Interest Coverage & Debt/EBITDAIC=6.3x, D/EBITDA=N/A (D&A unavailable)
✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x
Debt/Equity & Interest CoverageD/E: 1.88, IC: 6.3x
✗BuffettD/E < 0.5 AND Interest Coverage > 5x
Total Debt / Equity1.88
✗Lynch< 0.33
Cash - Long-term Debt$-41.2B
✗LynchPositive preferred
Total Debt / Shareholders' Equity1.88x
✗SchlossD/E < 1.00x✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗Dreman< 0.8
Current Assets / Current Liabilities0.96x
✗SchlossCurrent ratio >= 1.50x (app cutoff)✗Dreman> 1.5
Total Debt / Shareholders Equity1.88
✗Ackman<= 1.0
LT Debt / Total Assets Change36.37% -> 36.10%
✓PiotroskiDecreased YoY
LT Debt vs Net Current AssetsLT Debt $54.8B vs NCA $-1.7B
✗GrahamLT Debt <= Net Current Assets
Valuation models11% pass✓ 1✗ 8▾
Models split on IBM at $219.99 — fair values range $84.46–$375.13
Munger fair value$138.91
✗Munger-58.4% margin vs $219.99
Marks fair value$118.08
✗Marks-86.3% margin vs $219.99
Lynch fair value$138.35
✗Lynch-59.0% margin vs $219.99
Akre fair value$375.13
✓Akre+41.4% margin vs $219.99
Templeton fair value$101.67
✗Templeton-116.4% margin vs $219.99
Ackman fair value$179.08
✗Ackman-22.8% margin vs $219.99
Dreman fair value$128.70
✗Dreman-70.9% margin vs $219.99
Greenblatt fair value$84.46
✗Greenblatt-160.5% margin vs $219.99
Graham fair value$93.55
✗Graham-135.2% margin vs $219.99
Valuation17% pass✓ 5✗ 21▾
10 of 12 flag IBM's valuation — Oshaughnessy, Marks, Lynch +7 more
Revenue / market capitalization+0.3258; #3061/5203 (top 58.8%)
✗OshaughnessyTop 10% of eligible cross-section
Net income / market capitalization+5.11%; #1551/6251 (top 24.8%)
✗OshaughnessyTop 10% of eligible cross-section
(Operating cash flow - capex) / market capitalization+5.84%; #1291/4487 (top 28.8%)
✗OshaughnessyTop 10% of eligible cross-section
Trailing six-month price return through the evaluation date-9.24%; #3851/6203 (top 62.1%)
✗OshaughnessyTop 10% of eligible cross-section
Valuation ReasonablenessP/E=19.7x
✓MungerP/E < 25 or Owner Earnings Yield > 5%
P/B or P/E vs. Historical AverageP/E=19.7x, P/B=6.3x
✗MarksP/E < 15 or P/B < 2.0
Discount to Intrinsic Value-70.9% (IV=$128.70 vs Price=$219.99)
✗Marks>= 20% below intrinsic value
Basic earnings-growth PEG (dividends excluded)1.59
✗Lynch< 1.0 (ideally < 0.5)
P/E or FCF YieldP/E=19.7x, FCF Yield=5.8%
✗PabraiP/E < 15 or FCF Yield > 10%
Price / Book Value per Share6.32x
✗SchlossP/B <= 0.80x (app cutoff)✗Templeton< 1.5x✗Dreman< 1.2x
Price / Tangible Book Value per ShareN/A (non-positive TBVPS)
✗SchlossP/TBV <= 1.00x (app cutoff)
Book Value per Share Change+51.0%
✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)
Price / Diluted EPS19.7x
✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)
(EPS CAGR % + Dividend Yield %) / P/E0.78
✓Neff> 0.7 (Neff's published traditional edge)
Price / EPS19.7x
✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)✗Dreman< 12x
Price vs. Trailing Low100% of trailing low ($219.99)
✓Templeton<= 120% of trailing low (certified split-adjusted live window)
Price / FCF per Share17.0x
✓Ackman<= 25
Price / (CFO / Shares)15.6x
✗Dreman< 8x
EBIT / Enterprise Value4.8%
✗Greenblatt> 10%
Earnings Yield + ROC AssessmentEY=4.8%, ROC=N/A (invested capital <= 0)
✗GreenblattBoth EY > 10% and ROC > 25%
Price / 3-yr avg EPS25.6x
✗Graham<= 15x
Price-to-Book Ratio6.3x
✗Graham<= 1.5x
P/E x P/B162.00
✗Graham<= 22.5
Verdicts18% pass✓ 2✗ 9▾
Split decision: 9 FAIL · 4 NEUTRAL · 2 PASS
Overall verdict
•OshaughnessyNEUTRAL (Not ranked)✓MungerPASS (2/4)✗MarksFAIL (2/5)✗BuffettFAIL (2/9)✗LynchFAIL (3/7)✗PabraiFAIL (0/3)✗AkreFAIL (2/6)✗SchlossFAIL (3/7)•NeffNEUTRAL (5/6)✗SleepFAIL (2/6)✓TempletonPASS (4/8)•AckmanNEUTRAL (6/9)✗DremanFAIL (4/11)•PiotroskiNEUTRAL (F-Score 6)•GreenblattNot ranked✗GrahamFAIL (3/9)
Profitability33% pass✓ 17✗ 14▾
10 of 15 flag IBM's profitability — Oshaughnessy, Marks, Buffett +7 more
Net income / market capitalization+5.11%; #1551/6251 (top 24.8%)
✗OshaughnessyTop 10% of eligible cross-section
Discount to Intrinsic Value-70.9% (IV=$128.70 vs Price=$219.99)
✗Marks>= 20% below intrinsic value
Positive Net Income Frequency18/18 years positive
✓MarksPositive net income in >= 7 of last 10 years
Net Income Positive (10+ years)18/18 years positive
✓BuffettPositive every year for 10+ years
ROE (up to 5-year arithmetic mean)25.1%
✓Buffett> 15% arithmetic mean (app rule)
Operating Margin (10-yr trend)
✗BuffettStable or rising over 10 years
Free Cash Flow Proxy
✗BuffettPositive and growing
Earnings Variance (10-yr CoV)0.34
✗BuffettCoV < 0.3
Retained Earnings Effectiveness
✗Buffett$1 retained -> > $1 market value created
Basic earnings-growth PEG (dividends excluded)1.59
✗Lynch< 1.0 (ideally < 0.5)
3-5 Year EPS CAGR12.4%
✓Lynch15-30% (Fast Grower); > 0% to pass
ROE32.4%
✓Lynch> 15%
Margin of SafetyP/E=19.7x, P/B=6.3x
✗PabraiP/B < 1.5 or P/E < 15
Return on Equity29.3% (3-yr avg)
✓AkreROE > 20% (3-year avg)
Positive Diluted-EPS Years10/10 years positive
✓Schloss>= 70% positive over 5-10 observed years (app rule)
3-5 Year Diluted EPS CAGR12.4% over 5 years
✓Neff7%-20% annualized
Revenue growth vs. gross and operating margin trend
✗SleepRevenue rising; gross margin flat or falling; operating margin holding
5-Year EPS CAGR12.4% CAGR over 5 years
✓Templeton> 0% (5-year EPS CAGR)
Operating Margin Trend
✗TempletonNon-negative operating-margin trend over 3 years
Operating Income / Revenue
✗Ackman>= 15%
Net Income / Shareholders Equity32.4%
✓Ackman>= 15%
Pre-Tax Income / Revenue15.3%
✓Dreman>= 8%
Net Income / Shareholders' Equity32.4%
✓Dreman> 12%
Net Income / Total Assets6.97%
✓PiotroskiROA > 0
ROA Change YoY4.39% -> 6.97% (delta: +2.58%)
✓PiotroskiCurrent ROA > Prior ROA
(CFO / Total Assets) vs ROACFO/Assets=8.69%, ROA=6.97%
✓PiotroskiCFO/Assets > ROA
Gross Margin Change YoY56.7% -> 58.2%
✓PiotroskiImproved YoY
EBIT / Enterprise Value4.8%
✗Greenblatt> 10%
Earnings Yield + ROC AssessmentEY=4.8%, ROC=N/A (invested capital <= 0)
✗GreenblattBoth EY > 10% and ROC > 25%
Positive EPS (10 years)18/18 years positive
✓GrahamPositive EPS every year for 10 years
EPS Growth (3-yr avg, 10-yr window)-15.4%
✗Graham>= 33% growth
Growth38% pass✓ 7✗ 6▾
5 of 8 flag IBM's growth — Lynch, Sleep, Ackman +2 more
Positive Net Income Frequency18/18 years positive
✓MarksPositive net income in >= 7 of last 10 years
Basic earnings-growth PEG (dividends excluded)1.59
✗Lynch< 1.0 (ideally < 0.5)
3-5 Year EPS CAGR12.4%
✓Lynch15-30% (Fast Grower); > 0% to pass
Inventory Growth vs Revenue GrowthInv: -5.4% vs Rev: 7.6%
✓LynchInventory growth < Revenue growth
3-5 Year Diluted EPS CAGR12.4% over 5 years
✓Neff7%-20% annualized
Revenue growth vs. gross and operating margin trend
✗SleepRevenue rising; gross margin flat or falling; operating margin holding
5-year Revenue CAGR4.1%
✗SleepCAGR > 7%
5-Year EPS CAGR12.4% CAGR over 5 years
✓Templeton> 0% (5-year EPS CAGR)
3yr Median Revenue Growth2.2%
✗Ackman>= 5%
Positive EPS Growth Frequency3/5 years with positive EPS growth
✓AckmanPositive EPS growth in >= 3 of last 5 years
EPS Growth Direction$8.89 (2008) -> $11.17 (2025)
✓DremanPositive over recent years
EPS CAGR1.4% CAGR over 17 years
✗Dreman> 5% annualized
EPS Growth (3-yr avg, 10-yr window)-15.4%
✗Graham>= 33% growth
Cash Flow50% pass✓ 7✗ 5▾
5 of 10 pass — Oshaughnessy, Buffett, Lynch +2 more object
(Operating cash flow - capex) / market capitalization+5.84%; #1291/4487 (top 28.8%)
✗OshaughnessyTop 10% of eligible cross-section
FCF Positive18/18 years FCF positive
✓MarksPositive FCF in majority of recent years
Free Cash Flow Proxy
✗BuffettPositive and growing
FCF Positive and Growing$12.1B
✗LynchPositive and growing
P/E or FCF YieldP/E=19.7x, FCF Yield=5.8%
✗PabraiP/E < 15 or FCF Yield > 10%
Operating Cash Flow - Capital Expenditures$12.1B
✓Neff> $0 (app proxy for a strong fundamental case)
Positive Operating Cash Flow frequency18/18 years positive
✓SleepPositive OCF in >= 70% of available years
(OCF - CapEx) / Market Cap5.9%
✓Ackman>= 4%
Price / FCF per Share17.0x
✓Ackman<= 25
Price / (CFO / Shares)15.6x
✗Dreman< 8x
Operating Cash Flow$13.2B
✓PiotroskiCFO > 0
(CFO / Total Assets) vs ROACFO/Assets=8.69%, ROA=6.97%
✓PiotroskiCFO/Assets > ROA

Business & financials

Company Profile

Industry: Computers

SIC Sector: Industrial Machinery & Computing

Size: Mega Cap($207.3B)

Revenue: $67.5B+7.6% YoY

Net Income: $10.6B+75.9% YoY

Financial Snapshot

Operating Margin--

Return on Equity32.4%

Debt / Equity1.88

Current Ratio0.96

EPS (Diluted)$11.17+73.7% 1y

Shares Retired−1.2% / −2.4% 2y

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Shareholder Return

Fiscal 2025

Issued 1.2% of shares last year, 2.4% issued over two.

Buybacks: —
Dividends: $6.3B

What drove EPS

A buyback raises earnings per share without the company earning more. This splits each year's change into the two.

FY22

−71.7% = −71.5% + −0.7%

FY23

352.2% = 357.7% + −1.2%

FY24

−21.0% = −19.7% + −1.6%

FY25

73.7% = 75.9% + −1.2%

Earnings Fewer shares More shares

The two parts do not sum exactly to the total — the difference is the cross-term, plus preferred capital where the company has any. It is left visible rather than distributed into the other two.

Share count is the denominator the filer used for diluted EPS, recovered as net income ÷ EPS — not the balance-sheet count, which is a point-in-time figure and would put the timing difference into this split. Years with a loss are omitted: a smaller share count makes a loss per share larger, so the decomposition inverts.

Company Financials

Annual data (10-K) · Last 5 years

Metric	FY 2025	FY 2024	FY 2023	FY 2022	FY 2021
Market Cap	$207.3B	$229.7Best.	$157.4Best.	$108.9Best.	$101.9Best.
Revenue	$67.5B↑8%	$62.8B↑1%	$61.9B↑2%	$60.5B↑6%	$57.4B
Operating Income	--	--	--	--	--
Net Income	$10.6B↑76%	$6.0B↓20%	$7.5B↑358%	$1.6B↓71%	$5.7B
EPS (Diluted)	$11.17↑74%	$6.43↓21%	$8.14↑352%	$1.80↓72%	$6.35
Gross Margin	58.2%↑3%	56.7%↑2%	55.4%↑3%	54.0%↓2%	54.9%
Operating Margin	—	—	—	—	—
ROE	32.4%↑47%	22.1%↓34%	33.3%↑346%	7.5%↓75%	30.4%
Total Debt	$61.3B↑11%	$54.9B↓3%	$56.5B↑11%	$50.9B↓1%	$51.7B
Shareholders' Equity	$32.6B↑20%	$27.3B↑21%	$22.5B↑3%	$21.9B↑16%	$18.9B
Current Ratio	0.96↓8%	1.04↑8%	0.96↑4%	0.92↑5%	0.88
Debt / Equity	1.88↓7%	2.01↓20%	2.51↑8%	2.32↓15%	2.73
Operating Cash Flow	$13.2B↓2%	$13.4B↓3%	$13.9B↑34%	$10.4B↓18%	$12.8B
Free Cash Flow	$12.1B↓2%	$12.4B↓2%	$12.7B↑40%	$9.1B↓15%	$10.7B

Score history

Historical Score Timeline

Industry peers

Industry Peers

Similar companies in Computers

IBM vs Peers — Financial Grading

Revenue$67.5BTop 25%

Net Income$10.6BTop 25%

ROE32.4%Median

D/E1.88Bottom 25%

Op. Margin—

Curr. Ratio0.96Bottom 25%

Company	Market Cap	Price	Revenue	Net Income	ROE	D/E	Op. Margin	Curr. Ratio	Graham	Buffett	Lynch	Greenblatt	Piotroski	Dreman
Apple Inc.AAPL	$4.81T	$329.40	$416.2B	$112.0B	151.9%	1.23	32.0%	0.89	1/9	5/9	3/7	1/3	F-Score 8	3/11
CISCO SYSTEMS, INC.CSCO	$420.8B	$106.74	$56.7B	$10.2B	21.7%	0.60	20.8%	1.00	4/9	6/9	3/7	0/3	F-Score 8	5/11
Palo Alto Networks IncPANW	$317.7B	$388.41	$9.2B	$1.1B	14.5%	0.00	13.5%	0.94	1/9	3/9	3/7	0/3	F-Score 5	4/11
Seagate Technology Holdings plcSTX	$209.0B	$921.51	$12.2B	$3.2B	146.9%	1.65	33.6%	1.67	3/9	5/9	4/7	1/3	F-Score 8	6/11
WESTERN DIGITAL CORPWDC	$163.5B	$453.48	$9.5B	$1.9B	35.6%	1.31	24.5%	1.08	1/9	1/9	2/7	1/3	F-Score 3	3/11
Fortinet, Inc.FTNT	$130.2B	$175.96	$6.8B	$1.9B	149.8%	0.81	30.7%	1.17	2/9	5/9	3/7	1/3	F-Score 6	3/11
Hewlett Packard Enterprise CoHPE	$81.6B	$61.49	$34.3B	$57.0M	0.2%	0.91	-1.3%	1.01	1/9	0/9	1/7	0/3	F-Score 4	2/11
NetApp, Inc.NTAP	$41.1B	$209.18	$6.2B	$1.3B	94.4%	1.84	26.8%	1.44	3/9	5/9	3/7	1/3	F-Score 8	5/11