Stock reports › US › Technology

International Business Machines Corporation (IBM) stock analysis

IBM rebounds 13.40% in a month after earnings, but remains 24.73% below its 52-week high

IBM closed at 250.25 on Oct 27, 2026, up 13.40% over one month but down 15.52% year to date. It trades at a forward P/E of 18.91 (on next year's consensus EPS), below the sector median of 21.60, with a 2.69% dividend yield. Analysts' consensus is Buy, though the mean target of 259.67 sits only 3.76% above the price.

  • Price: 250.25
  • Market Cap (USD): $236.34B
  • P/E: 21.16×
  • Fwd P/E: 18.91×
  • Div Yield: 2.69%
  • 1Y Return: -18.61%
  • Mean Target: 259.67
  • Rating: Buy

Bull case

  • Free cash flow was $14.34B on a trailing basis, a 6.07% yield (78th percentile of US Technology), and it grew 17.77% year over year.
  • The Oct 21, 2026 report beat EPS consensus by 3.51% (2.95 versus 2.85) and revenue by 1.68%; ten firms raised or set price targets on Oct 22, including Goldman Sachs at 300.
  • Price is 0.13% above the 200-day average of 249.94 and 7.01% above the 50-day average, with MACD at 5.76 above its signal line at 2.87.

Bear case

  • Revenue growth of 6.83% year over year is in the 19th percentile of the sector (median 17.66%), and next year's EPS growth of 6.67% is in the 7th percentile.
  • Total debt is $67.14B against equity of $35.54B (debt to equity 1.89, 90th percentile), net debt to EBITDA is 3.16 and the current ratio is 0.85.
  • The 50-day average sits 6.44% below the 200-day average after a death cross on Mar 12, 2026, and the one-year return is -18.61% with a one-year maximum drawdown of -37.50%.

What to watch

  • Ex-dividend date Nov 10, 2026 for the 1.69 quarterly dividend, payable Dec 10, 2026.
  • The 200-day average at 249.94 and the 20-day high of 256.30 as near-term resistance and support markers.
  • The 52-week high of 332.46 and low of 199.19 as outer range boundaries.
  • Next short interest update after the Oct 15, 2026 reading of 19.9M shares (2.11% of float).

General

IBM is a large technology services company with software, consulting and infrastructure segments. Results are steady rather than fast-growing, and the shares have recovered sharply from the October lows but remain well below the 52-week high. Valuation is below the sector median on forward earnings, while analysts are positive but see limited near-term upside to their mean target.

Business

IBM provides integrated information technology solutions across Software, Consulting, Infrastructure and Financing. In fiscal 2025, Software was 44.41% of revenue ($29.96B), Consulting 31.21% and Infrastructure Services 23.30%. Americas generated 49.37% of revenue, EMEA 32.86% and Asia Pacific 17.77%.

Recent results

Q3 FY2026 (ended Sep 30, 2026) revenue was $17.10B, with diluted EPS of 2.3. Trailing revenue is $69.87B and trailing net income is $11.17B. The stock moved 4.21% after the Oct 21, 2026 report, versus an implied move of 9.04%.

Valuation and analysts

Forward P/E of 18.91 (next year's consensus EPS basis) compares with a sector median of 21.60 and an industry median of 11.43. Of the analyst ratings, 24 are Buy or Strong Buy, 23 Hold and 5 Sell. The mean target is 259.67 from 13 analysts.

Long-term investor

IBM shows modest, steady revenue growth and rising earnings, with strong cash generation and a 29-year record of dividend increases. Returns on equity are high, but ROIC is below the sector median and leverage is substantial. Valuation looks moderate versus peers, with growth the main question.

Growth durability

Revenue rose from $55.18B in fiscal 2020 to $67.54B in fiscal 2025; the 5-year revenue CAGR is 4.12%. Diluted EPS was 11.17 in fiscal 2025 versus 6.43 in 2024. Consensus EPS is 12.40 for the current year and 13.23 for the next.

Margins and returns

Operating margin is 17.98% (55th percentile) and free cash flow margin 20.53%. ROE of 35.21% ranks in the 73rd percentile, but ROIC of 10.83% is below the sector median of 15.21%. Gross margin slipped 0.20% over one year.

Balance sheet and cash returns

Total debt is $67.14B against cash and equivalents of $11.06B, with net debt to EBITDA of 3.16 and interest coverage of 6.52. The dividend yield is 2.69% with a payout ratio of 57.31%; dividend growth over three years is only 0.60%. Fiscal 2025 buybacks were 0.00.

Ownership and insiders

Institutional ownership is 66.00%, up 2.76% over three months. One insider sale, 25,000 shares worth 5.8M on Aug 26, 2026, was the only open-market insider trade in the last 90 days; there were no insider buys.

Swing trader

IBM is in a sharp short-term rebound, now sitting at the 200-day average after a rally from the October lows. Momentum is positive but approaching overbought, while the last two sessions were pullbacks on light volume. The longer-term trend remains weak given the death cross.

Trend

Price of 250.25 is 7.03% above the 20-day average (233.82), 7.01% above the 50-day average (233.85) and 0.13% above the 200-day average (249.94). The 50-day average remains 6.44% below the 200-day, a death cross dating to Mar 12, 2026.

Momentum

The 14-day RSI is 65.86, the MACD histogram is 2.89 and the 14-day ADX is 23.75, indicating a modest trend. Stochastic K is 84.29. The relative strength rating is 54, in the 22nd percentile of the sector.

Levels and recent action

The 20-day high is 256.30 (Oct 22) and the 20-day low 217.80. Bollinger upper band is 257.58. Shares fell 1.26% on Oct 27 on 3.6M volume (0.61 times relative volume), after 11.6M on Oct 22. ATR is 7.13, or 2.85% of price.

Flow and positioning

No upgrades or downgrades occurred in 30 days; most firms reiterated ratings on Oct 21-22. Short interest fell to 19.9M shares (2.11% of float) on Oct 15 from 24.2M on Sep 30.

Options

Implied volatility is low relative to its own year and to the sector, after dropping sharply since early October. Implied volatility sits slightly above realized, and liquidity is strong. No earnings fall within the 30-day expiry.

Volatility level

The 30-day implied volatility is 31.82%, an IV rank of 24 and a percentile of 23 against a 52-week range of 22.46% to 61.85%. It fell 11.7 points over five days. Sector IV rank percentile is 11.

Implied versus realized

The 30-day implied volatility is 2.4 points above 30-day realized volatility (ratio 1.08), and the volatility risk premium is +7.2 points (ratio 1.29). Premium is modestly rich relative to realized volatility.

Term structure and moves

The term structure is in contango (IV60 32.93%, IV90 33.56%) with 25-delta skew of +1.6 points. The expected 7-day move is 4.41% and the 30-day move 9.12%. Earnings are not before the Nov 27, 2026 expiry.

Premium yields and liquidity

For the 30-day expiry, the 30-delta put (240.00 strike, 4.10% out of the money) yields 26.15% annualized and the 30-delta call (265.00) 17.55%. An ex-dividend date falls before expiry. Liquidity score is 95; put/call volume ratio is 0.59.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.