Verdict
Fairly valued
What is International Business Machines Corporation (IBM) worth?
Currently $210.50 — 9% premium to Dolphy’s fair value · ● live
Steady operator
medium confidence in the point estimate
● live · as of 2026-07-21 21:28 · Market cap $203.2B
As of 2026-07-15, International Business Machines Corporation (IBM) looks fairly valued. Dolphy estimates a fair value of $193.00 versus a current price of $210.50 — a 9% premium to fair value.
Executive summary
IBM pre-announced weak Q2 FY26 results on 14 July 2026, warning of a shift in customer spending, and the stock fell more than 25%. At $216 the market cap is ~$203B (EV ~$262B). This is a classic steady-operator: ~$67.5B revenue, ~$11-12B free cash flow, 58% gross margin, a software-led hybrid-cloud/AI portfolio (Red Hat, watsonx), a large consulting arm, mainframe-anchored infrastructure, and a captive financing book. The debate is not whether IBM is a good cash machine — it is — but what its forward growth is worth now that a demand-rotation risk (toward security and hyperscaler-native vendors, and possibly AI displacing legacy consulting) has surfaced. Our work puts intrinsic value near $193: DCF $184-193, comps ~$213, reverse-DCF showing the price already banks ~6% FCF growth. Net: the crash reset an over-valued stock to roughly fair; we would not chase it into earnings, and note sell-side targets (~$296 mean) are stale and likely to fall.
How we value it
DCF + peer P/E comps, cross-checked with reverse-DCF
Every figure is computed from SEC filings by the analyst’s calculator tools and fact-checked by a second, independent model.
Investment thesis
About International Business Machines Corporation
International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers hybrid cloud and AI platforms that allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment delivers strategy and technology services and intelligent operations, providing business transformation, technology implementation, managed services, application modernization, and AI-powered solutions. The Infrastructure segment provides on-premises and cloud-based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, and facilitates IBM clients' acquisition of hardware, software, and services. It operates a data streaming platform. The company has strategic partnerships with various companies, including hyperscalers, service providers, global system integrators, and software and hardware vendors that include Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. It also has a strategic collaboration with Arm Holdings plc for the development of new dual-architecture hardware that helps enterprises run future AI and data intensive workloads; strategic partnership with three.ws to advance ai-powered 3d agent technology; and collaboration with Lightwell to help strengthen open source software supply chain. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.
Frequently asked questions
Is IBM a buy?
As of 2026-07-15, International Business Machines Corporation (IBM) looks fairly valued. Dolphy estimates a fair value of $193.00 versus a current price of $210.50 — a 9% premium to fair value.
What is IBM's fair value?
Dolphy's estimated fair value for International Business Machines Corporation (IBM) is $193.00, versus a current market price of $210.50.
Is IBM overvalued or undervalued?
International Business Machines Corporation (IBM) currently looks fairly valued — trading at a 9% premium to Dolphy's estimated fair value of $193.00.
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AI-generated research by Dolphy for educational and informational purposes only — not investment advice. Figures are computed from public sources and may contain errors.