International Business Machines Corporation (IBM) DCF Valuation
Transparent DCF models put International Business Machines Corporation (IBM)'s fair value in a range of $137.42 – $393.93 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $274.28 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $274.28, the market is pricing in roughly +12.3%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -3.4%. The price is betting on acceleration above its track record.
Current Price
$274.28
Fair-Value Range
$137.42 – $393.93
Market-Implied Growth
+12.3%/yr
vs -3.4% 5Y actual
IBM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $11.0B · 0.94B shares · net debt $51.0B
Estimated Fair Value
$137.42
-49.9% vs $274.28
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $274.28; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $184 | $196 | $211 | $228 | $249 |
| 9.0% | $150 | $159 | $168 | $180 | $193 |
| 10.0% | $125 | $131 | $137 | $145 | $154 |
| 11.0% | $105 | $109 | $114 | $119 | $126 |
| 12.0% | $88.41 | $91.68 | $95.29 | $99.31 | $104 |
About International Business Machines Corporation
International Business Machines Corporation (IBM) delivers comprehensive technology solutions and services across the globe. The company's operations are structured into four primary segments: Software, Consulting, Infrastructure, and Financing. The Software division provides hybrid cloud platforms and a range of software offerings, including Red Hat's enterprise open-source solutions. It also develops software for business automation, AIOps and management, integration, and application servers, in addition to data and artificial intelligence tools. This segment further supplies security software and services for threat, data, and identity management, and offers critical transaction processing software that supports essential on-premise workloads for industries such as banking, airlines, and retail. The Consulting arm delivers business transformation services, which encompass strategy development, business process design and operational improvements, data and analytics insights, and system integration. It additionally provides technology consulting and specialized application and cloud platform services. IBM's Infrastructure segment offers both on-premises and cloud-based server and storage solutions, specifically tailored for clients' crucial and regulated operations. It also extends support and solutions for hybrid cloud infrastructure, alongside remanufacturing and remarketing services for used equipment. The Financing segment provides various financial services, such as leasing, installment payment plans, loan financing, and short-term working capital solutions. Originally established in 1911 as the Computing-Tabulating-Recording Co., the company is now known as International Business Machines Corporation and maintains its headquarters in Armonk, New York.
- Sector
- Technology
- Industry
- Information Technology Services
- CEO
- Arvind Krishna