Long-established in the Software industry, International Business Machines Corp (IBM, Financial) has enjoyed a stellar reputation. Recently, it has seen a daily gain of 0.12%, juxtaposed with a significant three-month change of 29.18%. However, fresh insights from the GF Score suggest potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation indicate that the company might not live up to its historical performance. Join us as we delve into these pivotal metrics to unravel the evolving narrative of International Business Machines Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have been closely correlated with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores generally yield higher returns. Therefore, when picking stocks, investors should consider companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 7/10
- Growth rank: 4/10
- GF Value rank: 1/10
- Momentum rank: 6/10
Based on the above metrics, GuruFocus assigned International Business Machines Corp a GF Score of 66 out of 100, signaling poor future outperformance potential.
Understanding International Business Machines Corp's Business
International Business Machines Corp, with a market cap of $209.46 billion and sales of $62.36 billion, is a major player in every aspect of an enterprise's IT needs. The company primarily sells software, IT services, consulting, and hardware. Operating in 175 countries and employing approximately 350,000 people, IBM has a robust network of 80,000 business partners servicing 5,200 clients, including 95% of all Fortune 500 companies. Notably, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections worldwide.
Financial Strength Breakdown
International Business Machines Corp's financial strength indicators reveal concerns about the company's balance sheet health. The low cash-to-debt ratio of 0.23 indicates struggles in managing debt levels. Furthermore, the company's debt-to-equity ratio of 2.49 is worse than 95.04% of companies in the Software industry, suggesting an over-reliance on borrowing and vulnerability to market fluctuations.
Growth Prospects
The lack of significant growth is another area where International Business Machines Corp seems to falter, as evidenced by the company's low Growth rank. Additionally, its predictability rank of one star out of five adds to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Considering International Business Machines Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors seeking more robust investment opportunities can explore companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
