What is International Business Machines Corporation (IBM) DCF Fair Value and Intrinsic Value in 2026?

International Business Machines Corporation (IBM) intrinsic value is calculated using conservative multi-stage Discounted Cash Flow (DCF) models, 5-year free cash flow trajectories, Graham Numbers, and owner earnings multiples. LocalAlpha tracks real-time margin of safety against live market prices.

What is International Business Machines Corporation's historical Return on Invested Capital (ROIC) and Moat Rating?

International Business Machines Corporation operates in the Technology sector (Information Technology Services) with an economic moat rating of NARROW. LocalAlpha tracks 5-year audited quarterly ROIC, operating margin stability, and balance sheet solvency ratios.

What is International Business Machines Corporation's financial health rating and Piotroski F-Score?

International Business Machines Corporation's balance sheet quality is evaluated using the 9-point Piotroski F-Score, Altman Z-Score solvency model, debt-to-equity ratio, and quick/current liquidity coverage to guard against financial distress.

How does LocalAlpha monitor International Business Machines Corporation (IBM) for quarterly SEC filing thesis breaks?

LocalAlpha audits International Business Machines Corporation's 10-K, 10-Q, and 8-K regulatory filings on SEC EDGAR within 15 minutes of release. If reported metrics breach an investor's custom ROIC floor, operating margin boundary, or qualitative risk criteria, an autonomous breach audit is dispatched immediately.

StocksIBM

IBM

International Business MachinesTechnology / Information Technology ServicesINTACT

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers hybrid cloud and AI platforms that allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment delivers strategy and technology services and intelligent operations, providing business transformation, technology implementation, managed services, application modernization, and AI-powered solutions. The Infrastructure segment provides on-premises and cloud-based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, and facilitates IBM clients' acquisition of hardware, software, and services. It operates a data streaming platform. The company has strategic partnerships with various companies, including hyperscalers, service providers, global system integrators, and software and hardware vendors that include Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. It also has a strategic collaboration with Arm Holdings plc for the development of new dual-architecture hardware that helps enterprises run future AI and data intensive workloads; strategic partnership with three.ws to advance ai-powered 3d agent technology; and collaboration with Lightwell to help strengthen open source software supply chain. Additionally, it offers operational resilience, logistics, and future-ready technology to the UK Ministry of Defence through Team ORION. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

Share Price

$238.86

52W: $199.19 - $332.46

DCF Fair Value

$214.53

-11.3% Premium

Thesis Hub

P/E (TTM)

21.2x

ROIC

12.4%

Operating Margin

16.5%

FCF Yield

5.4%

Debt / Equity

1.89x

Piotroski Score

7/9

Altman Z-Score

3.31

Market Cap

$225B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($214.53)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)

—()

Period Range

$— - $—

DCF Fair Value

$214.53

MOS Buy Target (-25%)

$160.90

Valuation Overlays: DCF Fair Value ($214.53) 25% MOS Buy Target ($160.90) Revised Graham ($215.72) Graham Number ($96.25)

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price

$238.86

DCF Fair Value

$214.89

-11.2% Premium

Starting Free Cash Flow ($M)$12,050M

$100M$12,050M (Reported)$50,000M

Stage 1 Growth (Years 1-5)8.3%

-5%10% (Target)35%

Stage 2 Growth (Years 6-10)4.5%

0%5%20%

Discount Rate (WACC / Hurdle)9.0%

6%9% (Standard)15% (High Risk)

Terminal Perpetual Growth2.5%

1% (GDP Floor)2.5% (Inflation)4.0%

Net Debt ($M)$57,200M

-$100B CashBalance Sheet+$150B Debt

10-Yr PV of Cash Flows

$110.6B

PV of Terminal Value

$149.0B

Implied Enterprise Value

$259.6B

Implied Equity Value

$202.4B

Year	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr 8	Yr 9	Yr 10
Projected FCF ($M)	$13,050	$14,133	$15,306	$16,577	$17,953	$18,761	$19,605	$20,487	$21,409	$22,372
Present Value (PV)	$11,973	$11,896	$11,819	$11,743	$11,668	$11,186	$10,724	$10,282	$9,857	$9,450

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-148.2% Premium

$96.25

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $11.26BVPS: $36.57

Revised Graham Formula-10.7% Premium

$215.72

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Growth Rate (g%)

Bond Yield (Y%)

Buffett Owner Earnings5.1% Yield

$12.15 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $11.4BYield: 5.1%

Reverse DCF: Market Growth Expectation

MODEST BARRIER

4.7% CAGR (Next 10 Yrs)

At the current price of $238.86, the market is assuming the business will compound Free Cash Flow at 4.7% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict

✓ Low market hurdle: Easy for a wide-moat compounder to beat.

Autonomous Thesis Underwriting

Surveil IBM with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for International Business Machines. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 16.5% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

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Frequently Asked Questions: International Business Machines (IBM) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for International Business Machines.

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, International Business Machines has an estimated DCF intrinsic fair value of $214.53 per share compared to its current market price of $238.86. This represents an estimated 11.3% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $96.25.