IBM (IBM): analysis in plain words
Is IBM cheap or expensive? How it makes money, whether it grows and its risks, explained in plain words and with its official accounts.
IBM (IBM) is listed on the NYSE and we classify it in software and cloud. Below are its key dated figures, how it makes money, how it compares with its sector, what works for and against IBM according to those figures, and the questions people ask most about the stock. No buy or sell tips.
IBM (IBM) key figures as of November 4, 2026
| Figure | Value | What it measures |
|---|---|---|
| Share price | $254.32 | Last price on November 4, 2026 |
| P/E ratio (TTM) | 21.7x | Price over earnings per share |
| Revenue growth | +4.7% | Latest quarter vs the same quarter a year earlier |
| Net margin (TTM) | 16.0% | Profit for every 100 of sales |
| Net debt / EBITDA | 3.4x | Years of operating profit to repay debt |
| Dividend yield | 2.70% | Annual dividend over price |
| Market cap | $240.4 billion | What the stock market values it at |
The IBM figures come from Yahoo Finance, the same source the Fintols analysis uses, retrieved on November 4, 2026. Any IBM figure that is not available shows as N/A: we do not estimate it.
How IBM makes money
IBM reports Software, its largest segment, including Red Hat, automation, data and AI under watsonx, and transaction processing; Consulting, which provides business and technology services; Infrastructure, which sells IBM Z mainframes, Power servers and storage; and Financing, which funds client purchases. Its customers are mainly large enterprises and governments.
Over the last 12 months, IBM brought in revenue of $69.9 billion. For every 100 it sells, IBM keeps 58.0 after the direct cost of what it sells (gross margin) and 17.0 after all operating costs (operating margin). With 264,300 full-time employees, that is about $264,000 of revenue per employee.
IBM against its sector
To know whether a IBM figure is high or low you have to put it next to similar companies. This table compares IBM with the median of the 19 software and cloud companies Fintols covers, with data as of November 4, 2026.
| Figure | IBM | software and cloud median |
|---|---|---|
| P/E | 21.7x | 29.0x (19) |
| Revenue growth | +4.7% | +20.5% (25) |
| Net margin | 16.0% | 16.0% (25) |
| Dividend yield | 2.70% | 0.00% (25) |
| Net debt / EBITDA | 3.4x | 0.1x (23) |
In short, against the typical software and cloud company, IBM trades on a lower P/E, grows more slowly and pays a higher dividend yield. By size, IBM ranks number 6 of 22 software and cloud companies quoted in USD on Fintols.
The bull case for IBM
What works in favour of IBM, according to its figures as of November 4, 2026:
- IBM earns 34.8% a year on its shareholders' money (return on equity).
- IBM generates real cash: $12.4 billion of free cash flow over 12 months, 5.1% of its stock market value.
- On a P/E basis IBM trades cheaper than its sector: 21.7x its annual earnings, against 29.0x for the software and cloud median (19 companies with data).
The main risk for IBM
Debt is heavy: IBM carries net debt equal to 3.4x its annual EBITDA. With high interest rates or a weak year, interest payments eat into what it can invest or pay out.
And, like the rest of software and cloud, IBM is exposed to a competitor or AI making what it sells cheaper and forcing price cuts.
Frequently asked questions about IBM
Is it a good time to buy IBM stock?
Fintols does not tell you whether to buy or sell IBM, and nobody knows what the price will do tomorrow. What we can show you is where it stands today. As of November 4, 2026, IBM stock trades at $254.32, 24% below its 52-week high ($332.46) and 28% above its low ($199.19). Its P/E is 21.7x against a software and cloud median of 29.0x, and 19.2x on the earnings analysts expect over the next 12 months. With IBM, as with any stock, timing matters less than understanding the business, investing for the long run and not betting everything on a single company.
Does IBM pay a dividend?
Yes. As of November 4, 2026, IBM pays $6.76 per share a year, which at today's price is a yield of 2.70%. It uses 58% of its profit to pay it, which leaves room to keep paying it if profit dips. Its average dividend yield over the last five years is 3.45%. The software and cloud median on Fintols is 0.00%.
Is IBM stock expensive?
It depends on what you compare it with. On P/E, IBM trades at 21.7x its last 12 months of earnings: cheaper than the software and cloud median (29.0x). Including its debt, IBM is valued at 17.6x its EBITDA (EV/EBITDA). A high P/E alone does not make IBM expensive: it can be justified if earnings grow fast, and a low one can reflect a business in trouble.
Who are IBM's competitors?
On Fintols we compare IBM with Salesforce, Intuit and ServiceNow, which are also in software and cloud. As of November 4, 2026, Salesforce is worth $186.9 billion and trades on a P/E of 20.8; Intuit is worth $95.3 billion and trades on a P/E of 21.7; ServiceNow is worth $112.9 billion and trades on a P/E of 78.3. Each has a side-by-side comparison with IBM below.
IBM competitors
- Salesforce (CRM) analysis · IBM vs Salesforce comparison
- Intuit (INTU) analysis · IBM vs Intuit comparison
- ServiceNow (NOW) analysis · IBM vs ServiceNow comparison
To understand IBM better
More companies like IBM: software and cloud stocks, S&P 500 companies and S&P 100 companies. Open the full IBM analysis with its valuation and scenarios. Educational content about IBM, not investment advice.