International Business Machines Corporation (IBM) Stock Analysis
Score BCompounder · Grade B · Bearish
$223.31
$284.60
+27.4%
10/10
B
Compounder
Investment Thesis
Price is above modeled value range. Quality supports holding but not attractive for new positions.
No strong signal in either direction.
For New Investors
Price above modeled value range
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $284.60 (+27.4%). Significantly undervalued.
PEG-Based EPS
$176.31
FCF DCF Model
$290.30
EV/EBITDA
$290.30
Blended Fair Value
$284.60
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
76/120 points
Investable
ROE (3Y Avg)
29.3%
ROIC-WACC Spread
4.6%
D/E Ratio
2.1x
Current Ratio
0.9x
Interest Coverage
5x
FCF Positive Years
3/3
Quality Flags
- ROIC spread: 4.6pp (got 12/25 pts)
- Leverage: D/E 2.1x (0/15 pts)
- Liquidity: Current Ratio 0.93 (9/10 pts)
Market Sentiment
Wall Street Consensus
$320.00
+43.3% Upside
20 analysts
Range: $225.00 — $360.00
Rating: Buy
Our model is slightly more cautious than Wall Street.
Trend & Technical
Price ($223.54) is 16.2% below SMA 200 ($266.60). Bearish trend. Caution on entry.
Tech Score 58/100 — Neutral technical picture. Mixed signals across indicators.
Risk & Reward
Asymmetry Ratio
10.00:1
Expected Return
+86.6%
Bull Upside
+187.5%
Bear Downside
-10.0%
Excellent asymmetry: >3:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of IBM?
Based on our multi-method conviction analysis, the estimated fair value of International Business Machines Corporation (IBM) is $284.60. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is IBM a buy, sell, or hold?
IBM currently has a HOLD rating with a conviction score of 10/10. Price is above modeled value range. Quality supports holding but not attractive for new positions. Price above modeled value range.
Is IBM a high-quality stock?
International Business Machines Corporation has a quality grade of B (76/120 points), rated as Investable. Key metrics include ROE of 29.3%, ROIC-WACC spread of 4.6%, and D/E ratio of 2.1x.
What type of stock is IBM?
IBM is classified as a "compounder" in our framework. High dividend: 3.0%, Mature growth: 2.6%, High debt: D/E 2.1x, Large cap: $209.9B, Dividend paying: 3.0%
What do Wall Street analysts say about IBM?
20 Wall Street analysts have a consensus price target of $320.00 for IBM, representing +43.3% upside. Targets range from $225.00 to $360.00. The consensus recommendation is "Buy". Our model is slightly more cautious than Wall Street.
What are the risks of investing in IBM?
The risk/reward asymmetry ratio for IBM is 10.00:1, rated as Very Favorable. Excellent asymmetry: >3:1 ratio. Upside significantly outweighs downside. The expected return is +86.6%, with bull case upside of +187.5% and bear case downside of -10.0%.
What is the current trend for IBM?
IBM is in a bearish trend. Price ($223.54) is 16.2% below SMA 200 ($266.60). Bearish trend. Caution on entry. The technical score is 58/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.