International Business Machines Corporation (IBM)
IBM now reads as a steadier Hold with improving enterprise execution, but the current valuation spread still looks moderate rather than especially wide.
This page preserves the published note at the report date shown below. For the live workspace with the latest daily scheduled quote, filing, fundamentals, and refreshed model output, return to the company page.
Current workspace reference
Kept here as reference beside the published report: the current workspace now shows a Hold signal with low confidence as shares are currently being evaluated against an older daily scheduled quote of $225 versus $234 fair value, implying +4.0 upside.
Current workspace signal
Hold
Confidence
Low
Stale scheduled quote
$225
Fair value
$234
+4.0 upside
Reference freshness
Price basis
Stale scheduled quote
Latest daily scheduled quote is past the freshness window. Daily scheduled refresh as of May 21, 2026, 6:53 AM UTC. Fresh through May 22, 2026, 6:53 AM UTC.
Filing reference
4 filed Jun 4, 2026 | Reporting period Jun 4, 2026
Filing refreshed Jun 6, 2026, 6:27 AM UTC. Fresh through Jun 6, 2026, 6:27 PM UTC.
Fundamentals reference
Live SEC companyfacts currently cover revenue, free cash flow, and net cash / net debt. Reporting period end 2025-12-31.
Fundamentals refreshed 6 Jun 2026, 06:27 UTC. Fresh through 6 Jun 2026, 18:27 UTC.
Thesis scorecard
Growth
ModerateGrowth is improving, but still anchored to a steadier enterprise profile rather than a high-growth shape.
Profitability
ModerateMargins are healthier, though not yet at premium software levels.
Balance sheet
WeakLeverage remains material despite durable cash generation.
Valuation
ModerateThe valuation looks fair to mildly supportive, but not wide enough for a stronger rating.
Execution / Resilience
ModerateEnterprise entrenchment helps, though consulting and infrastructure still add some cycle exposure.
Bull / Base / Bear scenarios
Bull case
$250
Normalized support: Growth, margin, and cash-flow trends are mixed versus the upside case.
Base case
$234
Normalized support: Current margin, cash-generation, and balance-sheet profile are mixed.
Bear case
$216
Downside protection: Cash generation and balance-sheet support are mixed in the bear case.
Base-case assumptions
These are the published base-case assumptions behind the note. They are reasoned valuation inputs at the report date, not reported facts.
Revenue CAGR (5Y)
4.0%
+/- 1.0% => +/-$5/sh
Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest FY model-base revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: Hybrid cloud, software, and enterprise services support a steadier revenue base than IBM's legacy profile once implied.
Terminal Growth
2.5%
+/- 0.5% => +/-$3/sh
Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 2.5%, it sits well below the 4.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For International Business Machines Corporation, that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.
WACC
8.7%
+/- 0.5% => -$6/sh
Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Leverage remains meaningful, but enterprise cash generation is durable
Operating Margin (Year 5)
18.0%
+/- 100 bps => +/-$4/sh
Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's model-base operating margin (17.6%), which implies the current margin structure is broadly durable. Margin input keeps the base on durable software, consulting, and infrastructure economics rather than one period of mix or productivity benefit.
How to read the assumptions and sensitivities
These are base-case assumptions used to estimate fair value. They are reasonable model inputs, not reported facts.
Each sensitivity line shows the estimated fair-value-per-share change from a small move in that one input while the other inputs stay fixed.
bps means basis points. 100 bps equals 1.00 percentage point.
WACC sensitivity moves in the opposite direction because a higher discount rate lowers present value, while a lower discount rate raises it.
Model base vs reported fundamentals
Side-by-side view of the latest live reported fundamentals versus the current AnalystScope model base used in public valuation and thesis work.
Reported numbers show the latest company print. Model base is the comparable operating base AnalystScope uses for valuation work, which can include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported figures do not look durable.
Reported fundamentals source
SEC XBRL companyfacts API
Live SEC companyfacts currently cover revenue, free cash flow, and net cash / net debt. Reporting period end 2025-12-31.
Fundamentals refreshed 6 Jun 2026, 06:27 UTC. Fresh through 6 Jun 2026, 18:27 UTC.
Model-base impact on the thesis
For IBM, the model base is intended to reflect steadier hybrid-cloud and enterprise-cash-generation economics rather than quarter-specific mix or backlog timing.
| Metric | Live reported | Status | Model base | Status |
|---|---|---|---|---|
| Revenue (TTM) | $67.5B | Live reported | $67.5B +7.5% YoY Adjustment: Model revenue smooths consulting timing, infrastructure cycle noise, and hybrid-cloud mix rather than extrapolating a single quarter of backlog conversion. | Model base |
| Operating Margin | Unavailable | Unavailable | 17.6% +75 bps YoY Adjustment: Margin input keeps the base on durable software, consulting, and infrastructure economics rather than one period of mix or productivity benefit. | Model base |
| FCF (TTM) | $12.1B | Live reported | $12.3B 18.2% margin Adjustment: FCF input adjusts for working-capital timing and keeps the cash-conversion base conservative. | Model base |
| Net Cash / (Debt) | ($54.4B) | Live reported | ($38.0B) Leverage remains meaningful, but enterprise cash generation is durable Adjustment: Balance-sheet treatment remains cautious and does not minimize IBM's still-material debt load. | Model base |
Published investment view
The published report remains anchored to a Hold rating, with the latest note event recorded as New. The current workspace now evaluates the stock against $225 versus a base-case fair value of $234, implying +4.0 upside.
Fair value $234 vs. current $225 (+4.0 upside).
Confidence framing
Method agreement / dispersion
Valuation methods remain directionally aligned, with a moderate range from $221 to $246.
Margin strength
Operating margin is 17.6%, with +75 bps vs prior FY.
Balance sheet position
Balance sheet positioning is ($38.0B), with leverage remains meaningful, but enterprise cash generation is durable.
Key drivers
Hybrid cloud, software, and enterprise services support a steadier revenue base than IBM's legacy profile once implied.
Cash generation remains durable enough to support the valuation floor even with meaningful leverage.
The current multiple is more reasonable than many higher-growth software names, but the spread is still not especially wide.
Key risks
Consulting or infrastructure softness could keep growth and margin improvement below the current base case.
Leverage remains a constraint if execution weakens or cash conversion slips.
If the hybrid-cloud improvement narrative fades, the valuation support could narrow quickly.
What would change our view
A wider discount to fair value would make the enterprise-turnaround case more compelling.
Cleaner evidence of durable margin improvement across software and consulting would strengthen conviction.
If revenue quality weakens while leverage remains elevated, the current Hold case would deteriorate.
Near-term catalysts
Software growth, consulting demand, and infrastructure-cycle commentary remain the clearest near-term signals.
Free-cash-flow conversion and debt framing matter as much as headline revenue in this setup.
Any evidence that the current enterprise improvement is broadening beyond a few stronger segments would help sentiment.
What we are watching
Whether software and hybrid-cloud strength is broad enough to support the current through-cycle revenue base.
How durable free-cash-flow conversion remains after working-capital timing normalizes.
Whether leverage is trending down quickly enough to improve balance-sheet confidence.
Report archive context
Archive metadata below keeps the published report context visible. Current workspace valuation and quote context stay secondary on this page.
How to read note event vs rating
Note event tells you what changed in the latest published note. Published rating shows the stance after that event.
Both were published Apr 10, 2026.
Report updated
Apr 10, 2026
Coverage status
Active coverage
Latest note event
New
Published Apr 10, 2026
Current published rating
Hold
Published Apr 10, 2026
Analyst note
Watching software mix, consulting durability, and whether IBM's improving enterprise profile is strong enough to offset the leverage overhang.
What changed in the report
Apr 10, 2026
Added to AnalystScope coverage
Impact: New Hold view on steadier enterprise execution versus a moderate valuation spread
Apr 10, 2026
Kept debt treatment conservative
Impact: Avoids overstating upside from improving operations alone
Report timeline
Apr 10, 2026
Started coverage with a Hold view on improving enterprise execution and a still-contained spread to fair value.