International Business Machines (IBM) fair value: what the stock is really worth
As of Oct 21, 2026: fair value (intrinsic value) of International Business Machines stock $186, price $251, upside -26.0%, quality 63 out of 100. Rating: overvalued. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
69 individual criteria per stock, every one traceableSee the method →
Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Oct 21, 2026.
How to read this chart
60‑month range $96.92 – $326.89 · fair‑value band $120.94 – $263.56 · the $251.46 price screens above the $185.97 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Oct 21, 2026.
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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.
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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.
The Consulting segment delivers strategy and technology services and intelligent operations, providing business transformation, technology implementation, managed services, application modernization, and AI-powered solutions.
The Infrastructure segment provides on-premises and cloud-based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment.
Its Financing segment offers client and commercial financing, and facilitates IBM clients' acquisition of hardware, software, and services.
It has strategic partnerships with various companies, including hyperscalers, service providers, global system integrators, and software and hardware vendors that include Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others.
Additionally, the company operate a data streaming platform.
The company has a strategic collaboration with Arm Holdings plc for the development of new dual-architecture hardware that helps enterprises run future AI and data intensive workloads; and strategic partnership with three.ws to advance ai-powered 3d agent technology.
The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.
Stock analysis
International Business Machines (IBM) currently trades at $251.46, while our model-based Fair Value estimate is $185.97, 26.0% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the Growth Earnings group reads highest at a median of $235.94 per share, and 1 of the 22 models we run sit above the $251.46 price.
Bear case: the Dividend Discount group reads lowest at $73.10, and 21 of the 22 models stay below the price. Data coverage for this calculation is high.
Scenario range: $120.94 (bear) to $263.56 (bull), the price of $251.46 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 63/100 (solid quality), in the Technology sector.
Healthy Growth: Revenue growth appears healthy and is supported by profitability and cash-flow quality.
International Business Machines reported revenue of $67.5B in FY2025 versus $57.4B in FY2021, a compound +4.2%/yr. Reported net income was $10.6B in FY2025, compounding +16.5%/yr from FY2021.
Key figures
Market cap $240B Mega · P/E ratio 22.4 · P/S ratio 3.47 · EPS (TTM) $11.25 · Dividend yield 2.7% · Net margin 15.5% · Return on equity 34.5% · Return on assets (EBIT) 6.3%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 72 out of 100 (medium confidence).
What moves the price
The share trades about 23% below its 52-week high and 23% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Technology peers we cover trades at 35% fair-value upside, at −26%, IBM screens richer than that median.
Fair Value models
Bear$120.94Fair Value $185.97Bull$263.56
Price $251.46 · Upside -26.0%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2025 figures (about 10 months old). Earnings retained since then ($3.67 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.76/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Revenue growth 1 year
+7.6%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+3.7%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Basis: adjusted.
+17.3%
Earnings growth per share plus dividend.
Earnings per share, growth per year+14.6%
Dividend (yield on the price)2.7%
Per share before 2021divided by the spin-off factor 1.046
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.12.0% vs −0.6%, picking up
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.9% → 15%
Pace: the 5-year rate starts in 2020 (pandemic)
⚠ Revenue per share shrinking 2.4%/yr over ~10Y (margins eroding too) ⓘStructural-decline marker: revenue PER SHARE has fallen over the last decade (robust median trend, not a single year). Backtested across 2005 to 2017, such businesses trailed the market by about 2.5 percentage points per year. Display only: it does not change the fair value or the quality score.
Growth Forecast
A lot of optimism in the price
The price assumes more growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+9.0%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+3.7%
Yearly sales growth analysts expect, extended to five years.
After inflation (USA: IMF forecast 2.4% a year to 2030, 3.1% from 2016 to 2025) that is about +6.4% a year for the price and +1.2% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (99 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Negative
Recent news coverage is more negative than average.
AI conclusion: Enterprise scale and switching costs provide a moderate moat in IT services, yet competition and ongoing services pricing pressure limit durability.
Main risk: Ongoing services pricing pressure would directly compress margins in the core enterprise services business.
IBM and Red Hat's Lightwell platform has now remediated more than 400 previously unknown open-source vulnerabilities, and a new collaboration with Zscaler adds real-time inline protections for private apps while fixes are still in progress. This targets the shrinking window that AI-driven attacks create between disclosure and remediation. Our models currently see the stock as overvalued. Will these security enhancements reinforce IBM's position in enterprise services, or will they mainly expose the business to specialized cybersecurity players moving faster?
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Information Technology Services · 464 stocks
Beats the industry median on 6/14 measures
A mixed picture versus its industry peers.
Valuation
Quality Score63 · Above median
Fair Value upside−26.0% · Below median
Profitability
Return on equity (12 months)34.5% · Top 25%
Return on assets7.0% · Above median
Net margin (12 months)15.5% · Top 25%
Operating margin (12 months)16.6% · Top 25%
Growth and dividend
Revenue growth (quarter YoY)1.1% · Below median
Dividend yield (12 months)2.7% · Above median
Balance sheet
Debt / equity1.68× · Highest 25%
Valuation Multiplesvs Information Technology Services median · lower = cheaper
P/E (12 months)22.4× · Pricier than median
P/B7.34× · book value is mostly goodwill ⓘGoodwill and other intangible assets are larger than the equity. The book value mainly reflects prices paid for past acquisitions, so we do not rank this P/B against the peer group.
P/S (12 months)3.47× · Priciest 25%
Price / free cash flow20.7× · Pricier than median
EV/EBITDA17.0× · Pricier than median
PEG2.19× · Pricier than median
Strength profile in five axes (Snowflake)
This stockSector peers
VALUE (fair-value potential)0· sector 46
FUTURE (revenue growth)6· sector 29
PAST (return on equity)100· sector 36
HEALTH (low debt)16· sector 98
DIVIDEND (yield)54· sector 40
VALUE 0: the price sits above our fair-value range.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "International Business Machines Fair Value". https://www.fairvalue-calculator.com/stock/IBM
Frequently asked questions
Is International Business Machines (IBM) overvalued or undervalued?
As of Oct 21, 2026, our model estimates a fair value of $185.97 versus a price of $251.46, about −26% upside (overvalued).
What is the fair value of IBM?
Our model-based fair value for International Business Machines is $185.97 (as of Oct 21, 2026), built from audited fundamentals. The current price: $251.46.
What is the quality score of IBM?
International Business Machines has a Quality Score of 63/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for International Business Machines (IBM)?
Our model-based price target is the fair value of $185.97 (as of Oct 21, 2026) from 22 valuation models. Cautious scenario $120.94, optimistic scenario $263.56. It is a calculation from audited fundamentals, not an analyst target.
What is the International Business Machines stock forecast for 2026?
Our models put fair value at $185.97, about −26% upside versus a price of $251.46 (overvalued). Cautious scenario $120.94, optimistic scenario $263.56. The calculation is refreshed regularly with new filings.
What is the revenue of International Business Machines (IBM)?
International Business Machines reported trailing-twelve-month revenue of about $69.1B (latest available figure, as of Oct 21, 2026).
Does International Business Machines pay a dividend?
International Business Machines currently shows a dividend yield of 2.68% relative to its recent price (as of Oct 21, 2026).
What growth is priced into International Business Machines (IBM)?
For today's price to be fair in a discounted-cash-flow model, International Business Machines would have to grow free cash flow by +9.0 % per year for five years (discount rate 8.1 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew -1.7 % per year. As of Oct 21, 2026.
What discount rate (WACC) does the fair value of IBM use?
Our models discount International Business Machines at 8.1 %: a base by market capitalisation (mega), damped by beta 0.72, country premium for USA. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For International Business Machines that is +9.0 % per year a year over ten years, using the same discount rate (8.1 %) and the same formula as our fair value.
How much growth has International Business Machines (IBM) delivered so far?
Over the past 5 years revenue at International Business Machines grew -1.7 % a year. The price currently implies +9.0 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of International Business Machines (IBM) growing?
The median revenue growth in the sector is +10.7 % a year. That is the yardstick for the growth priced into International Business Machines (+9.0 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of International Business Machines (IBM)?
The free-cash-flow yield on the price is 4.83 %: that much free cash flow International Business Machines produces per unit of market value. When it exceeds the discount rate of our models (8.1 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of International Business Machines (IBM)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For International Business Machines it is $185.97 per share (as of Oct 21, 2026), against a price of $251.46. It is the blended result of 22 valuation models (cash flow, earnings, asset, dividend).
Is International Business Machines stock overvalued or undervalued in 2026?
As of Oct 21, 2026, IBM trades above its calculated fair value: price $251.46, fair value $185.97, a gap of about −26% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of IBM?
No. The price is what the market pays today ($251.46); the fair value is what the company's own numbers justify ($185.97). For International Business Machines the two are $65.49 per share apart. That gap is exactly why we show both numbers side by side.
How much is International Business Machines worth?
The market values International Business Machines at about $240B (market capitalisation, as of Oct 21, 2026). Per share that is $251.46; our models calculate a fair value of $185.97 per share.
What do the bullish and bearish scenarios say about IBM?
Our models span a range for International Business Machines: cautious scenario $120.94, base $185.97, optimistic $263.56 per share (as of Oct 21, 2026, price $251.46). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of IBM?
International Business Machines trades at a price-to-earnings ratio of 22.4 (as of Oct 21, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $185.97 is built from several models across several years. Median P/E at fiscal year-end, 5 fiscal years (2021 to 2025), reported earnings, 4 of the years ex one-offs: 25.7. Other multiples: PEG 2.2, P/B 7.3, P/S 3.5, EV/EBITDA 17.0.
What is the PEG ratio of IBM?
The PEG ratio of International Business Machines is 2.19 (P/E divided by earnings growth, as of Oct 21, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of International Business Machines (IBM)?
Balance-sheet figures for International Business Machines (as of Oct 21, 2026): return on equity 34.5%, debt of 1.68 per unit of equity. They feed the Quality Score of 63/100, which measures business quality independently of the share price.
How far is IBM from its 52-week high?
International Business Machines trades at $251.46, about 23% below its 52-week high of $326.89 and 23% above the low of $204.30 (as of Oct 21, 2026). Distance from the high says nothing about value: that is what the fair value of $185.97 is for.
Which stocks are comparable to International Business Machines?
From the same area (Technology) we also value Accenture plc, Tata Consultancy Services Limited, Infosys Limited, HCL Technologies Limited, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is International Business Machines stock attractive at the current price?
The data as of Oct 21, 2026: price $251.46, calculated fair value $185.97 (−26%), Quality Score 63/100, from 22 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of IBM calculated?
We run International Business Machines through 22 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $185.97, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 13.1 % above its aggregate fair value. International Business Machines itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of International Business Machines (IBM)?
The closing price on Oct 21, 2026 was $251.46. Our model-based fair value is $185.97, about −26% upside (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with International Business Machines right now?
Solid but not exceptional quality (63/100) and above fair value, neither a clear bargain nor a standout compounder. A fairly wide model range ($120.94 to $263.56) leaves room in how you read the outcome.
Where does the earnings growth of International Business Machines (IBM) come from?
Earnings per share at International Business Machines grew −4.1 % a year from 2014 to 2025. Broken into its drivers: revenue per share −2.5 %, EBIT margin −3.6 %, tax rate +1.7 %, residual (interest, one-offs) +0.4 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of International Business Machines
How large is the market capitalisation of International Business Machines (IBM)?
The market capitalisation of International Business Machines is $240B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of International Business Machines (IBM)?
The price-to-sales ratio of International Business Machines is 3.47 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of International Business Machines (IBM)?
Earnings per share at International Business Machines are $11.25 (price ÷ EPS = P/E 22.4). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of International Business Machines (IBM)?
The dividend yield of International Business Machines is 2.7% (payout 59.8%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of International Business Machines (IBM)?
The net margin of International Business Machines is 15.5% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of International Business Machines (IBM)?
The return on equity (ROE) of International Business Machines is 34.5% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of International Business Machines (IBM)?
On an EBIT basis the return on assets of International Business Machines is 6.3% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of International Business Machines (IBM)?
The operating margin of International Business Machines is 16.6% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at International Business Machines (IBM)?
Revenue at International Business Machines is growing +1.1% versus a year earlier (3y avg +3.7%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at International Business Machines (IBM)?
Earnings per share at International Business Machines are growing −1.8% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does International Business Machines (IBM) carry?
The net debt of International Business Machines is $53.5B (fiscal year 2025, ≈ 4.6 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Oct 21, 2026