Price to FCFE (P/FCFE)
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International Business Machines Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Free Cash Flow to Equity (FCFE)
International Business Machines Corp., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial information reveals significant fluctuations in both net cash provided by operating activities and free cash flow to equity over the five-year period. Net cash from operations demonstrates variability, while free cash flow to equity exhibits a more pronounced pattern of increase and subsequent moderation.
- Net Cash from Operating Activities
- Net cash provided by operating activities decreased from US$12,796 million in 2021 to US$10,435 million in 2022, representing a decline. A substantial recovery was then observed in 2023, with cash from operations reaching US$13,931 million. This level was maintained relatively consistently in subsequent years, with figures of US$13,445 million in 2024 and US$13,193 million in 2025. The trend suggests a period of operational challenge in 2022 followed by stabilization and strong performance in the following years.
- Free Cash Flow to Equity (FCFE)
- Free cash flow to equity experienced a dramatic increase from US$2,300 million in 2021 to US$9,795 million in 2022. This growth continued into 2023, reaching a peak of US$16,939 million. However, FCFE decreased to US$11,437 million in 2024, and then increased again to US$14,449 million in 2025. The substantial growth in FCFE between 2021 and 2023 suggests improved cash generation available to equity holders, potentially driven by factors such as increased profitability, efficient working capital management, or reduced capital expenditures. The subsequent moderation in 2024, followed by a rebound in 2025, indicates a degree of volatility in the factors influencing FCFE.
The divergence between the trends in net cash from operations and FCFE suggests that factors beyond core operational cash flow, such as financing activities or changes in non-operating assets and liabilities, are significantly impacting the cash available to equity holders. Further investigation into these contributing factors would be necessary for a complete understanding of the observed patterns.
Price to FCFE Ratio, Current
International Business Machines Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| AppLovin Corp. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Datadog Inc. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| ServiceNow Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| P/FCFE, Sector | |
| Software & Services | |
| P/FCFE, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
International Business Machines Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/FCFE, Sector | ||||||
| Software & Services | ||||||
| P/FCFE, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
3 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of International Business Machines Corp. Annual Report.
5 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibits considerable fluctuation over the observed period. Initial values indicate a relatively high valuation based on FCFE, followed by a significant shift towards lower multiples, and then a subsequent increase before a final decrease.
- Share Price
- The share price demonstrates an increasing trend from 2021 to 2023, rising from US$123.92 to US$184.13. This growth is then followed by a peak in 2024 at US$257.75, before declining to US$229.32 in 2025. The volatility suggests responsiveness to market conditions or company-specific events.
- FCFE per Share
- FCFE per share shows a substantial increase from US$2.56 in 2021 to US$10.80 in 2022, and continues to rise to US$18.48 in 2023. A decrease is then observed in 2024 to US$12.33, followed by a moderate recovery to US$15.40 in 2025. This indicates fluctuating cash flow generation available to equity holders.
- P/FCFE Ratio
- The P/FCFE ratio begins at 48.45 in 2021, indicating a high valuation relative to the FCFE generated. A dramatic decrease is then seen in 2022 to 11.97, and continues to 9.97 in 2023, suggesting the share price did not increase at the same rate as FCFE, or that FCFE increased significantly. The ratio then increases to 20.90 in 2024, likely due to the larger increase in share price relative to FCFE. Finally, the ratio decreases to 14.89 in 2025, aligning with the share price decline and a moderate increase in FCFE. The overall pattern suggests a period of re-evaluation followed by increased volatility.
The interplay between share price and FCFE per share is evident in the P/FCFE ratio’s movements. Periods of strong FCFE growth coupled with moderate share price increases result in lower P/FCFE ratios, while significant share price gains, even with fluctuating FCFE, lead to higher ratios. The most recent period shows a moderation of both share price growth and FCFE increase, resulting in a P/FCFE ratio that is lower than its 2024 peak but higher than its 2022 and 2023 levels.