IBM Stock Trades at Discount Amid Earnings Expectations

IBM stock is trading at a modest discount to its fair value of $241.14, sitting about 5% below that mark as of September 21st.

The company's financials have improved over the past five years, with revenue climbing from $57.35 billion in FY2021 to $67.53 billion in FY2025, while EBITDA grew by 43% to $16.17 billion.

However, IBM's debt-to-equity ratio is elevated at 189.5%, partly due to the Red Hat acquisition and the Confluent deal.

The company has been beating earnings expectations in recent quarters but the stock price hasn't reflected this, leading some analysts to caution that consulting growth may be a concern.