International Business Machines Corp. (NYSE:IBM)

The financial ratios exhibit notable fluctuations and trends over the reported periods. Each ratio displays distinct movements reflective of underlying market perceptions and company performance.

Price to Earnings (P/E) Ratio

The P/E ratio, available from March 31, 2020, shows general volatility. Initially, it ranges between approximately 19 to 24 through 2021, reflecting moderate market valuation relative to earnings. A sharp spike occurs at December 31, 2022, reaching 95.23, indicating either a significant drop in earnings or heightened market optimism. This peak declines rapidly to lower levels around 19 to 23 throughout 2023, signaling a possible correction or earnings recovery. However, from March 31, 2024 onward, an upward trend emerges again, rising steadily to near 40 by March 31, 2025. This increase suggests growing market expectations or potentially decreasing earnings relative to price.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio begins at 15.9 in March 2020 and climbs gradually to nearly 20 by the end of 2020 and early 2021, indicating a rising valuation relative to operating profit. Thereafter, the ratio fluctuates mostly between approximately 13.98 and 15.37 through much of 2022, suggesting more stable valuation relative to operating profit during this period. Late 2023 and into 2024 depict an upward movement again, peaking at 25.48 by December 2024 before moderating to 22.11 in March 2025. This trend implies increased market valuation relative to operating profits towards the latter periods.

Price to Sales (P/S) Ratio

This ratio grows steadily over the entire observed timeframe. Starting at 1.47 in March 2020, it climbs consistently with minor fluctuations, reaching above 3.8 by December 2024 before slightly dropping to 3.39 in March 2025. The general upward trajectory indicates increasing market value relative to sales, which may reflect improved revenue growth, enhanced market confidence, or price appreciation outpacing sales growth.

Price to Book Value (P/BV) Ratio

The P/BV ratio starts high at around 5.61 in early 2020, with a dip in mid-2020, recovering and fluctuating near 5 to 6 throughout 2021 and 2022. Notable growth occurs from late 2023 onwards, reaching a peak of 8.75 by December 2024, before a small decline to 7.93 in March 2025. This upward movement suggests the market values the company increasingly above its book value, which could result from expected future earnings growth or asset revaluation.

In summary, the overall trend across these ratios points to increasing market valuation relative to sales, book value, and operating profits in recent years, especially from late 2023 through 2024. The P/E ratio demonstrates more volatility, with a significant spike near the end of 2022, followed by normalization and renewed growth. These dynamics suggest shifts in investor sentiment, possibly influenced by earnings performance fluctuations, market conditions, or strategic developments affecting future profitability and growth expectations.

The data reveals several key trends in the share price, earnings per share (EPS), and price-to-earnings (P/E) ratio over the analyzed periods.

Share Price

The share price showed fluctuations throughout the periods. Initially, the price decreased slightly from $126.27 to $110.56 in late 2020 but then rebounded to around $142 by mid-2021. After a period of some volatility with prices hovering between $125 and $140 through early 2023, a notable upward trend occurred starting late 2023. The price surged substantially from approximately $140 up to $257.75 by the first quarter of 2025. This suggests a significant increase in market valuation during the most recent periods.

Earnings Per Share (EPS)

EPS data is partially missing for early periods but becomes available starting at the first quarter of 2021. The EPS started around $6.26 and experienced some fluctuations, dipping to a low of $1.4 at the last quarter of 2022. Following this dip, EPS steadily improved throughout 2023, reaching $7.58 by the last quarter of that year. In 2024 and early 2025, EPS peaked around $9.15 before declining again to $5.89 by the first quarter of 2025. This pattern indicates volatility with a recovery phase in 2023, followed by a slight decline at the most recent date.

Price-to-Earnings (P/E) Ratio

This ratio was not recorded initially but started at 19.3 in early 2021. It increased substantially to 95.23 by the last quarter of 2022, indicating a high market valuation relative to earnings, coinciding with the EPS low point during that period. Subsequently, the P/E ratio dropped significantly to around 19.07 by late 2023, reflecting improving earnings. However, the ratio rose again in 2024 and early 2025, reaching nearly 40, suggesting the market maintained optimistic valuation despite some earnings decline.

Overall, the patterns suggest a phase of volatility in earnings during 2022, followed by recovery and strong share price appreciation from late 2023 onward. The elevated P/E ratios at certain points reflect market expectations diverging from short-term earnings performance, especially evident during periods of low EPS. Recent share price gains appear to outpace earnings growth, implying heightened investor confidence or external factors influencing valuation.

The financial data reveals several key trends over the observed periods. The share price exhibits significant volatility but a general upward trajectory over the long term. Starting from $126.27 in March 2020, it initially dips to a low of around $110.56 in September 2020 before rising steadily to a peak of $257.75 in December 2024. This peak is followed by a slight decline to $229.33 in March 2025. The overall increase in share price reflects growing investor confidence and perceived value in the company over the five-year span.

The operating profit per share (OP) shows a consistent upward trend from its first recorded value in March 2020 at $7.59, climbing steadily to $10.37 by March 2025. This steady increase indicates improving profitability on a per-share basis, suggesting effective management of operations and possibly growth in earnings or operational efficiency throughout the timeframe.

The price-to-operating profit (P/OP) ratio, which measures the share price relative to operating profit per share, fluctuates throughout the periods with some notable patterns. It starts at 15.9 in March 2020, rises through 2021 and 2022, and reaches a relatively high point of 25.48 in December 2024 before slightly dropping to 22.11 in March 2025. The rising P/OP ratio alongside increasing share prices and operating profits per share suggests that investors are willing to pay increasingly more for each unit of operating profit, potentially reflecting optimistic market expectations or perceptions of future growth that exceed the organic increase in profitability.

Share Price

Shows significant fluctuations but an overall upward trend with notable increases after mid-2022, peaking near the end of 2024.

Operating Profit per Share

Displays steady and continuous growth, indicating improved operational performance and profitability.

Price-to-Operating Profit Ratio (P/OP)

Varies considerably, with a noticeable increase in the latter part of the period, implying heightened market valuation relative to operating profit.

In summary, the data demonstrates a company experiencing growing operational profitability and an increasing share price, with market valuations relative to operating profit rising especially near the end of the observed period. This pattern may suggest positive market sentiment and strong growth prospects perceived by investors, despite some short-term volatility in share price and valuation multiples.

Share Price

The share price shows significant fluctuation over the analyzed periods, beginning near 126 US$ in early 2020. There is a decline observed through 2020, reaching a low near 110 US$ in September 2020, followed by a recovery and stabilization close to 124 US$ by the end of that year. Gradually, the price increases in 2021, with some volatility towards the end of the year. The price remains generally steady through 2022 and early 2023, fluctuating mainly between 125 and 145 US$. From late 2023 onward, the share price demonstrates strong upward momentum, peaking at approximately 258 US$ in December 2024 before dropping slightly to about 229 US$ in March 2025. This last phase represents a considerable appreciation in share value compared to the earlier years.

Sales per Share

Sales per share data is first available at 82.39 US$ in March 2021 and exhibits a downward trend across the remaining periods. The values decrease steadily to around 63.77 US$ by March 2022 and then stabilize in the mid-60 US$ range for the subsequent two years. Minor fluctuations occur, but overall, sales per share demonstrate a moderate decline and relative stabilization near 67 US$ from late 2022 through early 2025, suggesting a leveling off of revenue generation per share.

Price-to-Sales (P/S) Ratio

The P/S ratio starts at 1.47 in March 2021 and shows an upward trajectory throughout the observed periods. Notable increases are identified during 2021 and early 2022, with levels rising above 2.0 and oscillating between approximately 1.8 and 2.1. From late 2023 to early 2025, a marked surge in the P/S ratio occurs, culminating at a peak of 3.81 in December 2024 before a slight decline to 3.39 by March 2025. This increasing ratio, especially pronounced in the last observed year, indicates market valuation is growing faster than sales per share, which reflects increased investor optimism or higher growth expectations.

Summary

Overall, the data reveals that while sales per share have gradually declined and then stabilized, the share price has experienced substantial growth, especially from late 2023 onwards. This divergence is reflected in the rising P/S ratio, suggesting that the market values the company more richly relative to its sales than before. The combination of steady sales per share and escalating market valuation could indicate improved profitability, future growth prospects, or increasing investor confidence over the last quarters analyzed.

Share price trends

The share price exhibited notable fluctuations over the observed quarterly periods. Beginning at $126.27 in March 2020, it declined to a low of $110.56 by September 2020 before recovering to approximately the $140 range by early 2021. Following a period of relative stability and moderate volatility throughout 2021 and 2022, the share price experienced a significant upward trajectory from early 2023 onward, reaching a peak of $257.75 by December 2024. A slight retracement to $229.33 was observed by March 2025. This overall pattern indicates increased investor confidence and market valuation in the most recent quarters.

Book value per share (BVPS) trends

The BVPS demonstrated more gradual and consistent growth over the corresponding periods. Starting at $22.52 in March 2020, the book value showed minor fluctuations but generally increased, reaching $29.45 by December 2024. This steady growth suggests an ongoing increase in the company’s net asset value per share, reflecting possible accumulation of retained earnings or asset growth that outpaces share issuance or other dilutive effects.

Price-to-Book Value (P/BV) ratio trends

The P/BV ratio exhibited pronounced variability, fluctuating between a low of 4.65 in September 2020 and reaching a peak of 8.75 in December 2024. Notably, the ratio tended to rise when the share price increased faster than the BVPS, particularly evident in late 2023 and throughout 2024 when the P/BV ratio surged significantly. This indicates market valuation expanding more rapidly than the underlying book value, suggesting heightened investor optimism, possibly due to expectations of future growth or intangibles not fully captured in book value.

Interrelations and insights

The data reveal that while the book value per share grew steadily, the share price experienced more volatile movements, especially strong appreciation in the later periods. The resulting increase in the P/BV ratio reflects the market demanding a premium over the net asset value. This could imply that investors anticipate strong future performance or better earnings potential. The ratio's peak near 9 times book value is relatively high, which may suggest overvaluation risk if growth expectations are not met. The overall pattern points to a company whose market valuation is increasingly driven by future prospects rather than just current net asset values.