Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.9 |
| P/S | 8.3 |
| EV/EBITDA | 2.6 |
| Fwd P/E | 7.6 |
| PEG | 4.5 |
| Analyst target | 7.5 |
- ▸Forward P/E: 16.3x
- ▸PEG: 2.05
IBM · Why this verdict
Why International Business Machines (IBM) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The company combines peer-leading margins and excellent free cash flow conversion with approximately 21% upside to the price target at a favorable risk/reward ratio, but negative price momentum — the stock is below its long-term moving average — keeps the setup in a wait-and-watch posture until technical trend stabilizes.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Two high-severity concentration risks — approximately 60% of revenue sourced from markets outside the United States, and dependence on server processor technology suppliers — represent structural vulnerabilities that could impair earnings if either risk materializes. Risk breakdown | Revenue from non-US markets decreases below 55% of total, or supplier diversification is disclosed, over the next 12 months. | ↓Deteriorating |
| CounterGeographic diversification can be a strength during periods of domestic weakness, and long-standing supplier relationships may reduce rather than increase procurement risk in practice. | ||
The company generates a return on equity of 36%, net margins near 16%, and converts 122% of reported net income into free cash flow — credentials that rank best-in-class versus peers and indicate the business earns more in cash than accounting income alone would suggest. Quality breakdown | Free cash flow conversion stays above 100% of net income and operating margin remains above 14% over the next four quarters. | →Stable |
| CounterTwo high-severity concentration risks — revenue heavily weighted toward markets outside the United States at approximately 60%, and dependence on a concentrated group of server processor technology suppliers — could impair margins or earnings if either risk crystallizes. | ||
With approximately 21% headroom to the price target and a risk/reward ratio that is favorable at roughly 3-to-1, the setup offers a material potential return against a defined downside. Price targets | The stock closes within 10% of the $325.81 price target within 12 months as fundamentals support the valuation gap. | Tripped↑Improving |
| CounterNegative price momentum — the stock is currently below its 200-day moving average — could extend before reversing, eroding the potential return window if the gap to the target takes longer than expected to close. | ||
The stock is trading below its 200-day moving average with declining volume, and the momentum dimension has failed its entry gate — though the long-term moving average itself is still trending higher at approximately 0.4% per month, suggesting this may be a pullback within an intact trend rather than a confirmed breakdown. Momentum breakdown | Momentum recovers as the stock reclaims the 200-day moving average and on-balance volume turns positive over the next 8 to 12 weeks. | ↓Deteriorating |
| CounterA rich valuation multiple can persist absent a near-term catalyst; if the next earnings report disappoints, the momentum deterioration could deepen before the upside gap closes. | ||
Two high-severity concentration risks — approximately 60% of revenue sourced from markets outside the United States, and dependence on server processor technology suppliers — represent structural vulnerabilities that could impair earnings if either risk materializes.
↓DeterioratingRisk breakdown
- Expectation
- Revenue from non-US markets decreases below 55% of total, or supplier diversification is disclosed, over the next 12 months.
CounterGeographic diversification can be a strength during periods of domestic weakness, and long-standing supplier relationships may reduce rather than increase procurement risk in practice.
The company generates a return on equity of 36%, net margins near 16%, and converts 122% of reported net income into free cash flow — credentials that rank best-in-class versus peers and indicate the business earns more in cash than accounting income alone would suggest.
→StableQuality breakdown
- Expectation
- Free cash flow conversion stays above 100% of net income and operating margin remains above 14% over the next four quarters.
CounterTwo high-severity concentration risks — revenue heavily weighted toward markets outside the United States at approximately 60%, and dependence on a concentrated group of server processor technology suppliers — could impair margins or earnings if either risk crystallizes.
With approximately 21% headroom to the price target and a risk/reward ratio that is favorable at roughly 3-to-1, the setup offers a material potential return against a defined downside.
Tripped↑ImprovingPrice targets
- Expectation
- The stock closes within 10% of the $325.81 price target within 12 months as fundamentals support the valuation gap.
CounterNegative price momentum — the stock is currently below its 200-day moving average — could extend before reversing, eroding the potential return window if the gap to the target takes longer than expected to close.
The stock is trading below its 200-day moving average with declining volume, and the momentum dimension has failed its entry gate — though the long-term moving average itself is still trending higher at approximately 0.4% per month, suggesting this may be a pullback within an intact trend rather than a confirmed breakdown.
↓DeterioratingMomentum breakdown
- Expectation
- Momentum recovers as the stock reclaims the 200-day moving average and on-balance volume turns positive over the next 8 to 12 weeks.
CounterA rich valuation multiple can persist absent a near-term catalyst; if the next earnings report disappoints, the momentum deterioration could deepen before the upside gap closes.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.6 |
| Gross margin | 7.7 |
| Op margin | 5.5 |
| Net margin | 7.8 |
| Current ratio | 3.2 |
| FCF quality | 9.1 |
| Moat | 6.9 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 36%
- ▸Strong margins: 16%
- ▸Excellent cash conversion: 122% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 4.8 |
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 2.6 |
- ▸Capitulation risk (RSI 25, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.6%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.8 |
| Analyst rating | 7.5 |
| Price target | 8.5 |
- ▸Analyst upside: 29%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 8.3 |
| growth rank | 5.9 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.7 |
| support resistance | 9.4 |
| 52w position | 2.7 |
| gap | 6.0 |
Risk (lower is worse)
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 7.5 |
| volatility | 0.0 |
| put call | 4.5 |
| implied vol | 2.5 |
| max pain risk | 3.0 |
| beta | 8.9 |
| debt equity | 2.9 |
| news risk | 5.5 |
- ▸High IV: 65%
- ▸Above max pain $115
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.6 |
| dividend safety | 5.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 1 days
- ▸Dividend: 3.2%
How the verdict was assembled
Engine trigger
News gate: 2 distinct critical events (2 MATERIAL_RISK articles).
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|NEWS_GATE:BLOCKEDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.6<4.5
- ASYMMETRY:1.1<1.5@spot
- EARNINGS_PROXIMITY:1d<=7d
Warning (0)
none
Reward-to-Risk
1.07
Upside
+16.0%
Downside
15.0%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: News gate: 2 distinct critical events (2 MATERIAL_RISK articles). The 10-dimension scores remain Insider at 7.3 (strongest), but MOMENTUM:3.6<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Insider at 7.3, Sentiment at 6.9, and Quality at 6.8; the weakest are Momentum at 3.6, Peer rank at 4.6, and Risk (lower is worse) at 4.8. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.07 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Peer Leading Quality Fcf Conversion
Trip ifFCF/NI ratio falls below 80% for 2 consecutive quarters, indicating a material deterioration in cash conversion quality.
- P2Material Upside Favorable Risk RewardTripped
Trip ifAnalyst consensus price target falls below the current price of $268.71, indicating the upside basis has been eliminated.
- P3Negative Momentum Below Long Term Average
Trip ifStock closes above the 200-day moving average for 10 consecutive trading days, indicating trend recovery and invalidating the momentum concern.
- P4Dual Concentration Risk
Trip ifRevenue from non-US markets falls below 50% of total for 2 consecutive annual reporting periods.