1. Financial Health Check
- Revenue: $62.75B
- Net Income: $6.02B
- Net Margin: 9.60%
- Revenue Growth (3yr CAGR): N/A (Need historical data)
- ROE (Return on Equity): N/A (Missing Equity)
- ROIC (Return on Invested Capital): [ROIC (Return on Invested Capital)]
- Debt/Equity: N/A (Missing Liabilities)
- Free Cash Flow Yield: [Free Cash Flow Yield]
- Free Cash Flow Trend: [Free Cash Flow Trend]
2. Financial Trends
3. Historical Data
| Year | Revenue | Net Income | Gross Profit | Op. Cash Flow |
|---|---|---|---|---|
| 2024 | 62.75B | 6.02B | 35.55B | - |
| 2024 | 62.75B | 6.02B | 35.55B | 13.45B |
| 2023 | 61.86B | 7.50B | 34.30B | 13.93B |
| 2022 | 60.53B | 1.64B | 32.69B | 10.44B |
| 2022 | 60.53B | 1.64B | 32.69B | - |
| 2021 | 57.35B | 5.74B | 31.49B | 12.80B |
| 2020 | 55.18B | 5.59B | 30.86B | 18.20B |
4. Competitive Advantage (Moat)
- Type of Moat: Switching Costs and Intangible Assets
- Strength: Wide
- Description: IBM possesses a strong competitive advantage due to high switching costs associated with their enterprise solutions, particularly in software and infrastructure. Clients rely on IBM for mission-critical operations, and changing providers would be disruptive and costly. The company's brand reputation, expertise in hybrid cloud and AI, client zero approach, and strong client relationships also create an intangible assets moat. Their focus on security and compliance, especially within regulated industries, enhances this competitive advantage.
5. Management Quality
- CEO: Arvind Krishna
- Capital Allocation: IBM is focused on disciplined capital allocation, returning capital to shareholders through dividends ($4.7B year-to-date), and investing in strategic acquisitions and internal innovation. They are increasing investments in AI and hybrid cloud. Management is committed to maintaining a strong balance sheet.
- Tone: Optimistic
- Key Quotes:
- "Clients continue to turn to IBM as a trusted partner to help them modernize, embed AI, and build resilient infrastructure." - Arvind Krishna
- "We are executing on our strategy of accelerating revenue growth and delivering higher profitability." - Arvind Krishna
6. Growth Prospects
- Total Addressable Market (TAM): [Size and Growth Rate]
- Market Share: [Current share and potential to gain]
- New Products/Services: [Pipeline]
7. Scuttlebutt & Soft Data
- Customer Reviews: [Trends in customer satisfaction]
- Employee Feedback: [Glassdoor ratings, turnover]
- Channel Checks: [Insights from suppliers or distributors]
8. Valuation
- P/E Ratio: [Current vs. Historical vs. Peers]
- EV/EBITDA: [Current vs. Historical vs. Peers]
- DCF Fair Value: [Estimate]
9. Risks
- [Risk 1: Macroeconomic Uncertainties (although management remains optimistic about demand)]
- [Risk 2: Competitive Pressures in the Cloud and AI markets]
- [Risk 3: Integration Risks related to Acquisitions (e.g., HashiCorp) and realizing expected synergies] ```
10. Checklist
- Do I understand the business model?
- Is the balance sheet healthy?
- Is management aligned with shareholders?
- Is the valuation reasonable?
- Is there a clear catalyst?