CluenexInternational Business Machines Corporation IBM
International Business Machines Corporation scores average on business quality (4.8 of 10). Here is why, in plain words, and what our sealed record shows.
Why it matters
- What International Business Machines Corporation does
IBM sells hybrid cloud infrastructure and enterprise software, charging corporate clients recurring subscription and support fees. Revenue is anchored by mission-critical IT workloads that large enterprises run on its systems.
- What it does best
IBM locks in Global 2000 enterprises through sticky mainframe systems that support high-volume transactions with low failure rates. It runs a gross margin of 58.1%, outperforming peers like CTSH at 33.4% and KD at 21.8%, driven by proprietary hardware and software integration that makes switching costs prohibitive.
- The main risk
A debt-to-equity ratio of 1.88 alongside $61.3 billion in total debt leaves the balance sheet vulnerable if cash generation falters. Interest coverage sits at 5.8x, meaning earnings must absorb substantial debt servicing costs before funding growth.
Quality, check by check
Scored against its own industry, from company filings.
Operating margin lands at 16.3% while free cash flow margin tracks solidly, turning higher as software mix expands. Scale yields better cash conversion, though heavy debt obligations consume significant earnings.
Enterprise switching costs form a wide moat locking in large corporate clients who cannot easily migrate core infrastructure. Its operating margin ranks in the middle of the pack at the 51st sector percentile, reflecting steady enterprise lock-in.
Revenue grew at 7.6% to reach $69.1B, showing a steady step up from prior years when growth hovered near the low single digits, though revenue growth still sits in the bottom quartile of its sector.
Total debt of $61.3B outweighs cash of $14.4B, keeping net debt elevated at $46.8B. Free cash flow reached $13.1B, supporting a dividend payout of $6.3B, leaving the balance sheet soft.
Insiders
Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.
1 sold $5.8M outside pre-planned sales.
Our sealed record on IBM
Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.
The first sealed verdicts appear here on Oct 11, 2026.
Questions
International Business Machines Corporation scores average on the Cluenex quality check (4.8 of 10), measured against its own industry. Profitability is fair, moat fair, growth slow and financial health weak.
In the last 90 days of SEC Form 4 filings: 1 sold $5.8M outside pre-planned sales.
Oct 21, 2026, after the close.
See IBM today
- Today's verdict on IBM, and why
- Fair value with cautious, base and optimistic cases
- The exact price that would change the verdict
- Which stocks each signal names, the night it fires
Cite this page: Cluenex, “International Business Machines Corporation (IBM)”, https://cluenex.com/stocks/ibm/, data as of Oct 10, 2026.