IBM · sample dossier
International Business Machines Corporation
44/100
FreshGenerated Oct 17, 2026 · 10:00 AM UTC · 2 hours ago
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EquityInternational Business Machines CorporationXNYS
Decision context
HOLD
70% convictionScore 44 · Hold
A mixed picture — no strong reason to buy or sell right now.
The stock trades near our estimate.
Current price
$232.14
Estimated value range
$180.86 – $309.21
Gap vs AlphaDog estimate
+1.2%
Supporting methods disagree by 70% — midpoint is illustrative, not a precise target.
Valuation is aligned with fundamentals; future returns depend on operational execution.
Market context
Price
Price when available
Pick how far back the chart looks
1 month
-2.4%
3 months
+9.0%
6 months
-8.4%
1 year
-17.3%
Financial trajectory
Executive summary & thesis
International Business Machines Corporation (IBM) provides enterprise IT software, infrastructure, and consulting services, sporting a market capitalization of $218.71B at $232.14 per share, with a trailing P/E of 20.63 and EV/EBITDA of 16.75.
- Durable cash generation provides stability, with IBM producing $13.79 FCF per share alongside a 15.5% net margin.
- Profitability remains resilient, evidenced by a 58.1% gross margin and Q2 2026 services revenue reaching $7,927M.
- IBM trades at an 80th percentile value discount with a 20.63 P/E multiple compared to Microsoft's 29.5 P/E.
- Significant balance sheet leverage creates vulnerability, with a Debt/Equity ratio of 1.89 and an Altman Z-score of 2.10.
- Top- and bottom-line momentum is stalling, marked by latest quarter YoY revenue growth of 1.1% and EPS contraction of -1.7%.
- Technical momentum is negative, demonstrated by a 1-year return of -17.3% and the stock trading below its 200-day moving average.
Things to keep in mind
- 1P/E 20.6xView source
- 2Debt/Equity 1.89View source
- 3Significant balance sheet leverage creates vulnerability, with a Debt/Equity ratio of 1.89 and an Altman Z-score of 2.10.View source
What to watch next
What changed recently
No material changes found in the last 30 days.
Why this rating
Score 44 · Hold
Data through
FreshJun 30, 2026
Factor profile
Balanced operator
| Factor | Score |
|---|---|
| Quality | 64 out of 100 (Neutral). Business health — profits, returns, and consistency. Higher means a more durable company. |
| Growth | 19 out of 100 (Weak). How fast sales and earnings are rising. Higher means the business is expanding faster. |
| Value | 56 out of 100 (Neutral). How cheap the stock looks for what you get. Higher means a more attractive price. |
| Safety | 46 out of 100 (Neutral). Balance-sheet cushion and fewer red flags. Higher means less risk of a nasty surprise. |
| Momentum | 28 out of 100 (Weak). Recent share-price trend. Higher means buyers have been in control lately. |
Another way to look at it
A calmer look at both sides of the IBM story
The consensus 'Hold' verdict dangerously misclassifies IBM as an insulated value haven, ignoring that paying 20.6x earnings and 16.8x EV/EBITDA for an enterprise decelerating to 1.1% revenue growth is an expensive trap.
While bulls celebrate free cash flow per share of $13.79 and a 58.1% gross margin, bottom-line momentum is already deteriorating with EPS contracting -1.7% year-over-year. Financial leverage represents an underappreciated structural risk, evidenced by a high Debt/Equity ratio of 1.89 and an Altman Z-score of 2.10 stranded in the grey zone. Furthermore, the consensus anchors on stale Q2 2026 figures older than 90 days while ignoring that an ROA of just 5.3% proves legacy asset inefficiency is consuming hybrid cloud gains. With the stock down 17.3% over the trailing year and trapped below its 200-day moving average, IBM lacks both the pricing power and the growth runway to sustain its current valuation multiple.
The consensus treats all reported data as timely despite Q2 2026 operating results ended June 30, 2026, being over 90 days stale as of 2026-10-17.
Neither side models the refinancing impact on earnings if IBM's 1.89 Debt/Equity capital structure faces higher debt service costs given its marginal 5.3% ROA.
The debate ignores enterprise consulting budget sensitivity, failing to account for how a slowdown below the current 1.1% revenue run-rate would turn operating leverage negative.
Extrapolating FCF stability ($13.79 per share) as permanent downside protection while net earnings contracted by -1.7% in the most recent quarter.
Framing a P/E of 20.6 as an attractive 'value discount' when paired with a depressed factor growth score of 19.4 out of 100.
Assuming hybrid cloud growth will organically accelerate top-line expansion without recognizing that quarterly revenue growth has already ground down to 1.1% YoY.
Revenue Growth YoY falls below 1.1%
Debt/Equity ratio increases above 1.89
Cash after investing
See whether IBM still makes cash after it spends to grow.
- Revenue Growth YoY falls below 1.1%
- Debt/Equity ratio increases above 1.89
- Debt/Equity improves from 1.89 or refinancing risk falls
Monitor these triggers
3 checkpoints before the next earnings print
Revenue Growth (YoY) (baseline: 1.1% in Q2 2026 ended June 30, 2026)
Net margin dropping below the baseline 15.5%.
Quarterly revenue growth falling into negative territory below 1.1% YoY.
Debt/Equity ratio expanding beyond the current 1.89 leverage level.
For learning and research only — not investment advice. AlphaDog doesn’t hold stocks and isn’t your financial advisor.
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