Is Time To Consider Buying International Business Machines Corporation (NYSE:IBM )?

Today, we’ll take a look at the well-known International Business Machines Corporation (NYSE: IBM). The company’s stock has received a lot of attention due to the sharp price gains on the New York Stock Exchange over the past few months. As a large-cap stock closely watched by analysts, you can assume that any recent changes in the company’s outlook are priced into the stock’s price. However, can this stock still be trading relatively cheap? Let’s take a closer look at International Business Machines’ valuation and outlook to see if there’s still a bargain to be had.

Check out our latest analysis for International Business Machines

Is International Business Machines still cheap?

Based on my valuation model, the stock currently appears to be fairly valued. It’s trading about 15% below my intrinsic value, which means that if you were buying International Business Machines today, you’d be paying a fair price for it. If you believe the company’s true value is $171.62, then the stock doesn’t have much room to rise beyond where it’s currently trading. What’s more, International Business Machines’ share price is likely to be more stable over time (relative to the market), as indicated by its low beta.

What does the future look like for International Business Machines?

Earnings and Revenue Growth
NYSE: IBM Earnings and Revenue Growth January 12, 2023

Investors looking for portfolio growth may wish to consider a company’s prospects before purchasing its stock. While a value investor will argue that what matters most is intrinsic value relative to price, a more compelling investment thesis is high growth potential at a low price. International Business Machines’ earnings are expected to double in the next few years, pointing to a very positive outlook for the future. That should lead to stronger cash flow, and thus a higher stock price.

what this means to you

Are you a shareholder? IBM’s optimistic future growth appears to be priced into the current share price, which trades around its fair value. However, there are other important factors that we do not consider today, such as the track record of its management team. Have any of these factors changed since the last time you looked at the stock? Are you confident enough to buy if the price fluctuates lower than the true value?

Are you a potential investor? If you’ve been following IBM, now might not be the best time to buy because it trades around its fair value. However, the rosy outlook is encouraging for the company, and means it’s worth further examining other factors, such as the strength of its balance sheet, in order to take advantage of the next price dip.

If you want to dig deeper into International Business Machines, you also need to understand the risks it currently faces.For example, International Business Machines Corporation has 5 Warning Signs (and 1 which makes us a little uncomfortable) We think you should know.

If you are no longer interested in International Business Machines, you can use our free platform to view our list of over 50 other stocks with high growth potential.

What are the risks and opportunities International Business Machines?

International Business Machines Corporation provides integrated solutions and services worldwide.

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  • Trading at a 15.4% discount to our estimate of its fair value

  • Earnings projected to grow 71.29% annually


  • Operating cash flow does not cover debt well

  • Significant insider transactions in the past 3 months

  • Profit margin (2.3%) is lower than last year (4.6%)

  • Large one-time items affecting financial results

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This article by Simply Wall St is general in nature. We use only an unbiased methodology to provide reviews based on historical data and analyst forecasts, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any of the stocks mentioned.

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