International Business Machines Corporation (IBM)
Quantitative Summary
DeterministicAt 26.4x earnings — a 59% discount to the sector average of 65.0x — IBM is in the lower valuation range. Financial health is average: Piotroski 6/9, Altman Z 3.2. DCF fair value of $135 implies 43% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of IBM reveal a capital allocation environment where the return on invested capital slightly outpaces the weighted average cost of capital by merely 0.3%, suggesting marginal value creation relative to financing costs despite a robust DuPont ROE decomposition driven significantly by high leverage (Equity Multiplier of 4.64x) rather than operational efficiency or margin expansion alone. While the Piotroski F-Score of 6/9 indicates reasonable financial strength and the negative Beneish M-Score of -2.40 signals low earnings manipulation risk, the Altman Z-Score of 3.3 places the firm in a zone warranting caution regarding long-term solvency margins. The high gross margin of 58.2% combined with revenue growth of 7.6% supports the net margin of 15.7%, yet this profitability is heavily dependent on asset turnover, which remains constrained at 0.44x, creating a structural reliance on financial leverage to sustain returns.
Valuation metrics present a stark divergence between market pricing and intrinsic value models; trading at 22.3 times earnings significantly below the sector average of 42.2 times suggests a substantial discount relative to peers, yet this apparent bargain is contradicted by a Discounted Cash Flow analysis implying fair value at $130 with -46.4% downside from current levels. This valuation gap reflects market skepticism regarding the sustainability of an implied free cash flow growth rate of 15.4% over ten years, particularly given that profitability factors (RMW) currently register weakly at -0.110. The negative Fama-French alpha of -23.35% annually further indicates underperformance relative to risk-adjusted benchmarks, implying the market is pricing in significant execution risks or structural headwinds not fully captured by historical earnings multiples.
Risk and reward dynamics are complicated by conflicting factor exposures; while the stock exhibits a distinct value tilt with an HML score of 0.462, the weak profitability signal suggests limited upside from quality factors. However, insider activity provides a counter-narrative to the pessimistic alpha data, as net buying totaling $417,155 over the last ninety days hints at management confidence despite the challenging valuation landscape and negative risk-adjusted returns. Investors must weigh whether the deep discount relative to sector peers compensates for the low ROIC spread and weak profitability factors or if the DCF-implied downside represents a more prudent assessment of future cash flow constraints.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 8% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6.1% | 8.1% | 10.1% |
|---|---|---|---|
| 2% | $181 | $113 | $79 |
| 3% | $238 | $135 | $90 |
| 4% | $350 | $167 | $105 |
Center = base case. Green = >10% upside, Red = >10% downside vs $329.23.
Pre-computed DCF: WACC=8.1%, terminal growth 3%. Fair value $135 (-43.3%). Not investment advice.
Valuation Context
Currently trading 59% below its 5-year average P/E of 50.5x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedIBM's current positioning at $252.97 within the technology sector reflects a complex interplay between price stability and underlying market sentiment. While the specific drawdown metrics are not explicitly detailed in the provided snapshot, the proximity to this level suggests that recent volatility has been contained enough to maintain a defined trading range. This structural behavior often indicates that momentum is currently supported by steady demand rather than speculative fervor, yet it remains susceptible to shifts in broader sector fundamentals. The absence of extreme price fluctuations implies a consolidation phase where risk dynamics are being recalibrated against the backdrop of technological industry headwinds or tailwinds not fully captured here. The fundamental environment for technology firms frequently introduces friction into technical patterns, meaning any observed momentum must be evaluated with caution regarding its sustainability. If recent declines have been shallow and recovery attempts show consistent volume support at this price point, it may signal a resilient floor rather than a fragile equilibrium waiting to break. Conversely, if the $252.97 level represents resistance after a period of stagnation, the risk profile could be skewed toward potential downside pressure should external catalysts fail to materialize. Ultimately, the technical setup presents a scenario where risk management is critical, as the distinction between a robust structural trend and a temporary pause depends heavily on how future price action interacts with this current valuation anchor.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-08 | $1.6900 | +0.6% |
| 2026-02-10 | $1.6800 | 0.0% |
| 2025-11-10 | $1.6800 | 0.0% |
| 2025-08-08 | $1.6800 | 0.0% |
| 2025-05-09 | $1.6800 | +0.6% |
| 2025-02-10 | $1.6700 | 0.0% |
| 2024-11-12 | $1.6700 | 0.0% |
| 2024-08-09 | $1.6700 | 0.0% |
| 2024-05-09 | $1.6700 | +0.6% |
| 2024-02-08 | $1.6600 | 0.0% |
| 2023-11-09 | $1.6600 | 0.0% |
| 2023-08-09 | $1.6600 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like DIA or XNTK, the fund manager is mechanically forced to buy or sell IBM shares regardless of International Business Machines Corporation's individual fundamentals. We estimate $28.9B of passive capital is structurally linked to IBM through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in International Business Machines Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If International Business Machines Corporation (IBM) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies NVIDIA CORP (NVDA) as the most exposed collateral stock, sharing 3 ETFs with IBM. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 37 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
IBM Ownership Dynamics
Passive funds hold 1 in every 7 IBM shares, reducing daily market volatility.
International Business Machines Corporation (IBM) exerts measurable gravity on the passive index market, currently representing 3.1% of the DIA (DIA) and 1.9% of the XNTK (XNTK). Across 38 tracked ETFs, approximately 128M shares (13.6% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest IBM Exposure
Float lock-up computed from 38 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
IBM Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for International Business Machines Corporation over the past year sits near $251.36 (9% of 252-day volume). The current price of $329.23 trades 31.0% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
IBM Capital Efficiency
How efficiently does International Business Machines Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
International Business Machines Corporation converts 66% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 0.5% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 10 | $214.64 | $2,146.4 |
| 2026-05-08 | 600 | $231.31 | $138,786 |
| 2026-05-06 | 103 | $229.03 | $23,590.09 |
| 2026-05-04 | 1,100 | $232.20 | $255,420 |
| 2026-04-24 | 37,581 | $231.08 | $8.7M |
| 2026-04-23 | 103,916 | $251.86 | $26.2M |
| 2026-04-22 | 77,827 | $255.68 | $19.9M |
| 2026-04-21 | 25,804 | $253.71 | $6.5M |
| 2026-04-20 | 25,896 | $253.47 | $6.6M |
| 2026-04-16 | 7,569 | $244.80 | $1.9M |
| 2026-04-15 | 15,294 | $240.27 | $3.7M |
| 2026-04-13 | 3,250 | $230.76 | $749,970 |
| 2026-04-10 | 300 | $237.18 | $71,154 |
| 2026-04-07 | 5,414 | $246.74 | $1.3M |
| 2026-04-06 | 5,275 | $248.16 | $1.3M |
| 2026-04-02 | 23,072 | $243.14 | $5.6M |
| 2026-03-31 | 4,447 | $237.25 | $1.1M |
| 2026-03-30 | 1,813 | $236.34 | $428,484.42 |
| 2026-03-27 | 5,293 | $241.67 | $1.3M |
| 2026-03-26 | 2,781 | $241.39 | $671,305.59 |
| 2026-03-25 | 29,702 | $240.59 | $7.1M |
| 2026-03-24 | 12,523 | $248.44 | $3.1M |
| 2026-03-23 | 547,627 | $241.77 | $132.4M |
| 2026-03-20 | 12,172 | $250.37 | $3.0M |
| 2026-03-18 | 36,201 | $256.11 | $9.3M |
| 2026-03-17 | 19,748 | $249.25 | $4.9M |
| 2026-03-16 | 3,153 | $246.28 | $776,520.84 |
| 2026-03-12 | 1,950 | $248.87 | $485,296.5 |
| 2026-03-11 | 4,145 | $250.20 | $1.0M |
| 2026-03-10 | 28,226 | $253.33 | $7.2M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| ACN | 0.447 | 0.516 | Moderate |
| ADP | 0.441 | 0.505 | Moderate |
| AMP | 0.432 | 0.470 | Moderate |
| TENB | 0.429 | 0.503 | Moderate |
| PAYX | 0.415 | 0.533 | Moderate |
| MA | 0.413 | 0.503 | Moderate |
| BANC | 0.409 | 0.437 | Moderate |
| CBRE | 0.403 | 0.468 | Moderate |
| MCO | 0.397 | 0.465 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare IBM to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.