IBM

Software, cloud & internet · United StatesRank 349 of 829Prices 2 Nov 2026Model 1.4

15070100

A good business with a real question mark: the price, a crack, or both.

Biggest deductions

Multiples vs own history and peers−6
Quality of growth−4
Segment of the future (consultant)−3

Strengths

Recurring software+2
Cash flow+1
Quantum position+1

How the score is built

From 100 to 65, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.

100Start

65Score

Hover or select a step to see what drove it. Steps with findings open them below.

Key numbers

As of 2 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.

Price: 252.51 USD
Median analyst target: 265.00 USD
Upside to median: +4.9%
Analysts: 25
Target range: 174.00 – 300.00 USD
52-week change: −18%
P/E (trailing): 21.5
Forward P/E: 19.3
PEG: 2.97

Findings

Every deduction and every plus, with its source. Open a step to read them.

Business

Is the company getting stronger, not just bigger? · 3 findings−10 of −30

Quality of growth
Revenue grew only 1.4–5.5% a year in 2021–24. The jump to +7.6% in 2025 and 4–5% in 2026 is carried by acquisitions: USD 8.3bn in cash acquisitions in 2025 and 10.9bn TTM (Confluent). Organic growth is low.
stockanalysis.com
−4
Segment of the future (consultant)
Consulting is standing still: $5.3bn in Q2 (0%, +1% in constant currencies), and Strategy & Technology has been at $11.4–11.7bn since 2023. The consulting part (about 30% of revenue with Intelligent Operations) is the part that AI coding tools put most pressure on.
sec.gov
−3
Capital allocation
The acquisitions are partly debt-financed: net debt has risen from $43.8bn (2024) to $57.1bn. Share-based pay has doubled from 0.98 to $1.88bn since 2021, and the share count rises 1.3% a year despite buybacks.
stockanalysis.com
−3

Price

Today's multiples against the company's own history and its peers. · 1 finding−6 of −35

Multiples vs own history and peers
Forward P/E 17.8 vs 12.8–24.5 in 2021–25 (mid-range after the drop from 24.5). P/FCF 15.5 vs 11.2–22.9 and EV/EBITDA 16.5 vs 15.1–20.3. Cheaper than software peers (Microsoft, SAP, Oracle around 30x), but that is reasonable with 4–5% growth and 57 bn $ in net debt.
stockanalysis.com
−6

Cracks

Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 4 findings−10 of −35

Guidance cut
Q2 revenue missed: large, capex-sensitive software deals were postponed, Transaction Processing fell 8% and IBM Z 42%. Full-year growth was lowered to 4–5% at constant currency from over 5%. The FCF target (+1bn $) was maintained.
business-news-today.com
−3
Competition (AI disruption)
The stock is −21.5% over 52 weeks. It was downgraded on fears that AI coding tools (e.g. Claude Code) can modernize COBOL systems and bypass IBM's mainframe and consulting base. Wedbush believes the fear has eased, but the risk is structural.
finance.yahoo.com
−3
Debt and liquidity
Cash fell $6.3bn to $8.2bn in H1 after acquisitions. Debt $65.3bn, debt/EBITDA 3.7 and current ratio 0.79. The rating is stable (A-/A3/A-), and there are no rating triggers.
sec.gov
−3
Execution (quantum roadmap)
The 2026 targets (verified quantum advantage and a fault-tolerant module, Kookaburra) have not yet been confirmed as met. Starling (200 logical qubits, 2029) is still a plan, and Quantinuum and Google lead on gate fidelity.
ibm.com
−1

Plus

Only documented strengths. · 3 findings+4 of +15

Recurring software
Software ARR is USD 24.6bn (+8%). Red Hat accelerated to +11%, Data +19%, and OpenShift ARR is USD 2.2bn. Gross margin has risen from 54.9% (2021) to 58.1% and operating margin from 9.7% to 18.5%.
sec.gov
+2
Cash flow
FCF $13.8bn TTM (+12.7%) covers the dividend ($6.3bn) and buybacks ($1.0bn) with a good margin. The target of about $1bn more FCF in 2026 was maintained despite the revenue miss.
stockanalysis.com
+1
Quantum position
IBM has the most concrete fault-tolerant roadmap among the large players: qLDPC codes (up to 90% fewer physical qubits), Nighthawk/Loon (2025), Kookaburra (2026), Cockatoo (2027) and Starling in Poughkeepsie (2029, 200 logical qubits and 100m operations). Cumulative quantum 'book of business' is just under $1bn.
thequantuminsider.com
+1

Caveats

What the score does not capture, or where the data is weak.

The whole company has been scored. The quantum part is an option: IBM does not disclose quantum revenue separately (only a cumulative 'book of business' of just under $1bn in 2017–24, under 1% of revenue per year). Growth in 2025–26 is partly bought (HashiCorp, Confluent about $11bn). Q3 figures come 21/10. Insider trading and customer concentration in the consulting segment have not been investigated.