Should you buy IBM stock? (February 2024)

IBM stock analysis. Ticker: $IBM

Enthusiasm for AI has boosted IBM stock with shares up 13% this year. The company now has a market cap of 170 billion dollars, with 13 billion of cash on the balance sheet and 57 billion of long term debt. Revenue over the last 12 months comes to 62 billion with 7.5 billion of net income and 11.2 billion of free cash flow so the stock is currently valued at 23 times earnings or 19 times free cash flow.

That sounds reasonable but IBM has long been considered a value trap. Since March 2013, revenues have fallen by more than a third, and the stock has badly underperformed the rest of the market. While the Nasdaq 100 has gained almost 400% in that time, IBM returns are essentially flat.

However, recent excitement around generative AI seems to have changed the narrative. Revenue in Q4 grew 4% to over 17 billion and management said its AI business doubled in the quarter. The company talked up its hybrid cloud offering as well as partnerships with some big name players like Meta and AWS. So if IBM has finally found a way to grow its business then it may well be one of the cheapest AI stocks on the market.

#investing #stocks #ibmstock #3mb

[rtorcato]

IBM is also a quantum computing play. Seems like their linux buyouts are forgotten by executives.

[Steve-nbkg]

Does anyone actually know what IBM does anymore?

[Gen_eralmathias]

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