International Business Machines Corp

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IBM : NYSE : Technology
$180.95 up 0.69 | 0.38%
Today's Range: 180.09 - 181.34
Avg. Daily Volume: 3624400.0
02/22/17 - 1:02 PM ET

Financial Analysis


Even though sales decreased, the net income has increased. INTL BUSINESS MACHINES CORP has average liquidity. Currently, the Quick Ratio is 1.04 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 27.93% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)21770.022059.0
EBITDA ($mil)0.06025.0
EBIT ($mil)0.05035.0
Net Income ($mil)4501.04463.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)8527.08194.0
Total Assets ($mil)117470.0110495.0
Total Debt ($mil)42169.039889.0
Equity ($mil)18246.014262.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin0.056.8
EBITDA Margin0.027.31
Operating Margin0.022.83
Sales Turnover0.680.74
Return on Assets10.111.93
Return on Equity65.1193.7
Debt Q4 FY16 Q4 FY15
Current Ratio1.211.24
Debt/Capital0.70.74
Interest Expense0.0262.0
Interest Coverage0.019.22


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)950.86965.73
Div / share1.41.3
EPS4.734.59
Book value / share19.1914.77
Institutional Own % n/a n/a
Avg Daily Volume3607090.03455245.0

Valuation


HOLD. INTL BUSINESS MACHINES CORP's P/E ratio indicates a significant discount compared to an average of 28.19 for the IT Services industry and a significant discount compared to the S&P 500 average of 26.35. For additional comparison, its price-to-book ratio of 9.45 indicates a significant premium versus the S&P 500 average of 2.94 and a discount versus the industry average of 9.67. The price-to-sales ratio is similar to the S&P 500 average, but it is significantly below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, INTL BUSINESS MACHINES CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
IBM 14.62 Peers 28.19   IBM 10.44 Peers 19.60

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

IBM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

IBM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
IBM 12.81 Peers 21.10   IBM 9.75 Peers 3.03

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

IBM is trading at a significant discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

IBM trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
IBM 9.45 Peers 9.67   IBM -8.96 Peers 5.77

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

IBM is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, IBM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
IBM 2.16 Peers 5.36   IBM -2.23 Peers 13.00

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

IBM is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

IBM significantly trails its peers on the basis of sales growth

 

 

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