Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Common Stock Valuation Ratios (Price Multiples)

Microsoft Excel

Current Valuation Ratios

International Business Machines Corp., current price multiples

Microsoft Excel
International Business Machines Corp. Accenture PLC Adobe Inc. Intuit Inc. Mastercard Inc. Microsoft Corp. Oracle Corp. PayPal Holdings Inc. Salesforce Inc. ServiceNow Inc. Visa Inc. Software & Services Information Technology
Selected Financial Data
Current share price (P) $125.74
No. shares of common stock outstanding 903,180,353
Growth rate (g) 5.48%
 
Earnings per share (EPS) $6.36
Next year expected EPS $6.71
Operating profit per share $7.60
Sales per share $63.50
Book value per share (BVPS) $20.93
Valuation Ratios (Price Multiples)
Price to earnings (P/E) 19.77 29.40 28.67 56.43 33.84 25.55 26.74 26.03 108.19 369.38 31.54 29.36 25.27
Price to next year expected earnings 18.75 23.93 22.59 45.30 18.36 21.18 19.00 22.48 105.42 346.37 25.97 24.50 20.69
Price-earnings-growth (PEG) 3.61 1.29 1.07 2.30 0.40 1.24 0.66 1.65 41.13 55.61 1.47 1.48 1.14
Price to operating profit (P/OP) 16.54 22.79 23.83 45.34 29.16 22.29 16.44 25.46 285.09 330.57 24.57 26.03 22.28
Price to sales (P/S) 1.98 3.44 8.76 9.16 15.57 9.37 4.23 4.28 5.90 14.41 16.11 8.26 6.65
Price to book value (P/BV) 6.01 8.89 9.34 7.09 40.20 11.16 4.99 2.69 22.99 10.33 11.21 10.65

Based on: 10-K (reporting date: 2021-12-31).

If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.


Historical Valuation Ratios (Summary)

International Business Machines Corp., historical price multiples

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Price to earnings (P/E) 19.40 19.30 13.35 14.25 25.07
Price to operating profit (P/OP) 16.23 15.90 11.94 9.41 12.22
Price to sales (P/S) 1.94 1.47 1.63 1.56 1.82
Price to book value (P/BV) 5.90 5.24 6.04 7.40 8.20

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Valuation ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. International Business Machines Corp. P/E ratio increased from 2019 to 2020 and from 2020 to 2021.
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. International Business Machines Corp. P/OP ratio increased from 2019 to 2020 and from 2020 to 2021.
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. International Business Machines Corp. P/S ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. International Business Machines Corp. P/BV ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Price to Earnings (P/E)

International Business Machines Corp., historical P/E calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
No. shares of common stock outstanding1 899,309,986 893,594,090 888,408,023 889,866,256 921,167,894
Selected Financial Data (US$)
Net income attributable to IBM (in millions) 5,743  5,590  9,431  8,728  5,753 
Earnings per share (EPS)2 6.39 6.26 10.62 9.81 6.25
Share price1, 3 123.92 120.71 141.71 139.72 156.55
Valuation Ratio
P/E ratio4 19.40 19.30 13.35 14.25 25.07
Benchmarks
P/E Ratio, Competitors5
Accenture PLC 36.58 28.32 24.58 24.10 26.18
Adobe Inc. 48.90 41.69 57.17 46.11 57.41
Intuit Inc. 75.17 49.52 48.17 46.88 37.26
Mastercard Inc. 41.61 52.84 42.21 38.62 46.33
Microsoft Corp. 35.14 35.04 26.86 50.00 26.25
Oracle Corp. 15.84 16.69 16.89 45.90 22.49
PayPal Holdings Inc. 34.73 75.10 57.19 51.82 50.54
Salesforce Inc. 48.20 1,204.70 107.70 731.11 324.94
ServiceNow Inc. 487.70 978.47 106.89
Visa Inc. 34.83 40.76 32.08 30.03 37.19
P/E Ratio, Sector
Software & Services 35.22 38.84 29.82 39.44 31.77
P/E Ratio, Industry
Information Technology 29.30 32.94 24.23 23.80 24.48

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Data adjusted for splits and stock dividends.

2 2021 Calculation
EPS = Net income attributable to IBM ÷ No. shares of common stock outstanding
= 5,743,000,000 ÷ 899,309,986 = 6.39

3 Closing price as at the filing date of International Business Machines Corp. Annual Report.

4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 123.92 ÷ 6.39 = 19.40

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. International Business Machines Corp. P/E ratio increased from 2019 to 2020 and from 2020 to 2021.

Price to Operating Profit (P/OP)

International Business Machines Corp., historical P/OP calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
No. shares of common stock outstanding1 899,309,986 893,594,090 888,408,023 889,866,256 921,167,894
Selected Financial Data (US$)
Operating income (in millions) 6,865  6,786  10,543  13,217  11,799 
Operating profit per share2 7.63 7.59 11.87 14.85 12.81
Share price1, 3 123.92 120.71 141.71 139.72 156.55
Valuation Ratio
P/OP ratio4 16.23 15.90 11.94 9.41 12.22
Benchmarks
P/OP Ratio, Competitors5
Accenture PLC 28.35 22.21 18.63 16.75 19.47
Adobe Inc. 40.64 51.75 51.63 42.06 44.86
Intuit Inc. 62.00 41.56 40.45 37.92 25.94
Mastercard Inc. 35.85 41.92 35.46 31.07 27.39
Microsoft Corp. 30.79 29.30 24.54 23.63 24.93
Oracle Corp. 14.31 12.17 13.83 12.83 16.52
PayPal Holdings Inc. 33.98 95.94 51.72 48.58 42.65
Salesforce Inc. 431.39 511.08 223.46 395.31 908.77
ServiceNow Inc. 436.46 583.07 1,590.30
Visa Inc. 27.13 31.45 25.83 23.88 20.52
P/OP Ratio, Sector
Software & Services 31.22 32.42 26.18 23.02 22.96
P/OP Ratio, Industry
Information Technology 25.84 28.11 20.97 17.06 18.20

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Data adjusted for splits and stock dividends.

2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 6,865,000,000 ÷ 899,309,986 = 7.63

3 Closing price as at the filing date of International Business Machines Corp. Annual Report.

4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 123.92 ÷ 7.63 = 16.23

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. International Business Machines Corp. P/OP ratio increased from 2019 to 2020 and from 2020 to 2021.

Price to Sales (P/S)

International Business Machines Corp., historical P/S calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
No. shares of common stock outstanding1 899,309,986 893,594,090 888,408,023 889,866,256 921,167,894
Selected Financial Data (US$)
Revenue (in millions) 57,350  73,620  77,147  79,591  79,139 
Sales per share2 63.77 82.39 86.84 89.44 85.91
Share price1, 3 123.92 120.71 141.71 139.72 156.55
Valuation Ratio
P/S ratio4 1.94 1.47 1.63 1.56 1.82
Benchmarks
P/S Ratio, Competitors5
Accenture PLC 4.28 3.26 2.72 2.35 2.45
Adobe Inc. 14.94 17.04 15.11 13.23 13.32
Intuit Inc. 16.09 11.78 11.05 9.52 6.99
Mastercard Inc. 19.14 22.14 20.30 15.13 14.51
Microsoft Corp. 12.81 10.85 8.38 7.51 6.19
Oracle Corp. 5.38 4.33 4.74 4.41 5.56
PayPal Holdings Inc. 5.71 14.71 7.91 6.90 6.93
Salesforce Inc. 9.24 8.88 9.00 8.89 6.96
ServiceNow Inc. 19.02 25.66 19.36 16.63 14.55
Visa Inc. 17.79 20.27 16.86 15.01 13.57
P/S Ratio, Sector
Software & Services 9.91 9.10 7.37 6.22 5.61
P/S Ratio, Industry
Information Technology 7.71 7.32 5.60 4.70 4.56

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Data adjusted for splits and stock dividends.

2 2021 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= 57,350,000,000 ÷ 899,309,986 = 63.77

3 Closing price as at the filing date of International Business Machines Corp. Annual Report.

4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 123.92 ÷ 63.77 = 1.94

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. International Business Machines Corp. P/S ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Price to Book Value (P/BV)

International Business Machines Corp., historical P/BV calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
No. shares of common stock outstanding1 899,309,986 893,594,090 888,408,023 889,866,256 921,167,894
Selected Financial Data (US$)
Total IBM stockholders’ equity (in millions) 18,901  20,597  20,841  16,796  17,594 
Book value per share (BVPS)2 21.02 23.05 23.46 18.87 19.10
Share price1, 3 123.92 120.71 141.71 139.72 156.55
Valuation Ratio
P/BV ratio4 5.90 5.24 6.04 7.40 8.20
Benchmarks
P/BV Ratio, Competitors5
Accenture PLC 11.06 8.51 8.15 9.44 10.08
Adobe Inc. 15.94 16.53 16.03 12.76 11.50
Intuit Inc. 15.71 17.71 20.00 24.12 26.72
Mastercard Inc. 49.43 53.00 58.15 41.94 33.17
Microsoft Corp. 15.16 13.11 10.30 10.02 7.69
Oracle Corp. 41.57 14.01 8.59 3.84 3.90
PayPal Holdings Inc. 6.66 15.76 8.33 6.93 5.67
Salesforce Inc. 4.73 4.48 7.66 9.93 7.78
ServiceNow Inc. 30.36 40.91 31.48 39.04 48.15
Visa Inc. 11.41 12.23 11.17 9.10 7.61
P/BV Ratio, Sector
Software & Services 13.45 12.77 11.20 9.38 7.75
P/BV Ratio, Industry
Information Technology 12.35 11.46 8.82 7.28 5.70

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 Data adjusted for splits and stock dividends.

2 2021 Calculation
BVPS = Total IBM stockholders’ equity ÷ No. shares of common stock outstanding
= 18,901,000,000 ÷ 899,309,986 = 21.02

3 Closing price as at the filing date of International Business Machines Corp. Annual Report.

4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 123.92 ÷ 21.02 = 5.90

5 Click competitor name to see calculations.

Valuation ratio Description The company
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. International Business Machines Corp. P/BV ratio decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.