Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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International Business Machines Corp. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Current Valuation Ratios
International Business Machines Corp., current price multiples
| International Business Machines Corp. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Datadog Inc. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||
| Current share price (P) | |||||||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||||||
| Growth rate (g) | |||||||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||||||
| Next year expected EPS | |||||||||||||||||||||
| Operating profit per share | |||||||||||||||||||||
| Sales per share | |||||||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||||||
| Price to next year expected earnings | |||||||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||||||
| Price to book value (P/BV) | |||||||||||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
International Business Machines Corp., historical price multiples
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The valuation ratios exhibit varied trends over the five-year period. Generally, ratios increased between 2021 and 2024, followed by a decrease in 2025 for most metrics. This suggests a period of increasing investor optimism followed by a potential correction or reassessment.
- Price to Earnings (P/E)
- The Price to Earnings ratio experienced significant volatility. It rose sharply from 19.40 in 2021 to 71.56 in 2022, then decreased to 22.50 in 2023, increased again to 39.68 in 2024, and finally declined to 20.31 in 2025. This fluctuation indicates substantial shifts in investor expectations regarding earnings growth. The high value in 2022 may reflect temporary factors or market exuberance. The return towards the 2021 level in 2025 suggests a normalization of earnings expectations.
- Price to Operating Profit (P/OP)
- The Price to Operating Profit ratio demonstrated a more moderate increase from 16.23 in 2021 to 17.99 in 2023, with a dip to 14.35 in 2022. It then rose to 25.48 in 2024 before decreasing to 18.20 in 2025. This trend generally aligns with the P/E ratio, suggesting that changes in operating profit are influencing investor valuations. The 2024 peak and subsequent decline mirror the pattern observed in the P/E ratio.
- Price to Sales (P/S)
- The Price to Sales ratio consistently increased from 1.94 in 2021 and 2022 to 2.73 in 2023, peaking at 3.81 in 2024, and then decreasing to 3.19 in 2025. This indicates that investors were willing to pay more for each dollar of revenue generated, particularly in 2024. The decline in 2025 suggests a potential reassessment of revenue growth prospects.
- Price to Book Value (P/BV)
- The Price to Book Value ratio increased from 5.90 in 2021 to 7.49 in 2023, reaching 8.75 in 2024, and then decreased to 6.59 in 2025. This suggests an increasing premium placed on the company’s net asset value, peaking in 2024, followed by a reduction. The trend indicates changing perceptions of the company’s ability to generate returns on its assets.
Overall, the observed patterns suggest a period of increasing valuation multiples followed by a moderation in 2025. This could be attributed to various factors, including changes in market conditions, investor sentiment, or company-specific performance expectations. The fluctuations in the P/E ratio are particularly noteworthy, indicating significant shifts in earnings expectations.
Price to Earnings (P/E)
International Business Machines Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income attributable to IBM (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Software & Services | ||||||
| P/E Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
EPS = Net income attributable to IBM ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of International Business Machines Corp. Annual Report.
4 2025 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The price to earnings (P/E) ratio exhibited considerable fluctuation over the five-year period. Initial values increased significantly before stabilizing and then decreasing again. This analysis details the observed trends and potential interpretations.
- Share Price
- The share price demonstrated an increasing trend from 2021 to 2024, rising from US$123.92 to US$257.75. A subsequent decrease to US$229.32 was observed in 2025.
- Earnings Per Share (EPS)
- Earnings per share experienced a substantial decline from US$6.39 in 2021 to US$1.81 in 2022. A strong recovery followed, with EPS reaching US$8.18 in 2023. While EPS decreased to US$6.50 in 2024, it increased significantly to US$11.29 in 2025.
- Price to Earnings (P/E) Ratio
- The P/E ratio began at 19.40 in 2021. A dramatic increase to 71.56 occurred in 2022, coinciding with the significant drop in earnings per share. The ratio then decreased to 22.50 in 2023 as earnings recovered. A further increase to 39.68 was noted in 2024, followed by a decrease to 20.31 in 2025. The fluctuations in the P/E ratio largely mirror the inverse relationship with earnings per share, but the magnitude of the changes suggests shifts in investor sentiment or expectations beyond just earnings performance.
The substantial increase in the P/E ratio in 2022, despite declining earnings, indicates that investors were willing to pay a much higher price for each dollar of earnings. This could be attributed to anticipated future growth or a reassessment of the company’s value. The subsequent moderation of the P/E ratio in 2023 and 2024, coupled with increasing earnings, suggests a more balanced valuation. The final decrease in 2025, despite continued earnings growth, may indicate a shift in market perception or a return to more conservative valuation levels.
Overall, the period was characterized by volatility in both earnings and investor valuation. The P/E ratio’s movements suggest a dynamic interplay between reported earnings and market expectations.
Price to Operating Profit (P/OP)
International Business Machines Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Software & Services | ||||||
| P/OP Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of International Business Machines Corp. Annual Report.
4 2025 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The Price to Operating Profit (P/OP) ratio exhibited fluctuating behavior over the five-year period. Initially, a decrease was observed, followed by an increase and subsequent decline. The share price and operating profit per share both generally increased over the period, though not consistently, influencing the P/OP ratio’s movements.
- Overall Trend
- The P/OP ratio began at 16.23 in 2021, decreased to 14.35 in 2022, then increased significantly to 17.99 in 2023. A substantial peak was reached in 2024 at 25.48 before declining to 18.20 in 2025. This suggests periods of investor optimism followed by correction.
- Share Price Influence
- The share price demonstrated an upward trend from 2021 to 2024, increasing from US$123.92 to US$257.75. This increase likely contributed to the rise in the P/OP ratio during those years. The subsequent decrease in share price to US$229.32 in 2025 coincided with a decrease in the P/OP ratio.
- Operating Profit per Share Influence
- Operating profit per share also generally increased, moving from US$7.63 in 2021 to US$12.60 in 2025. However, the rate of increase was not consistent. The slight decrease in operating profit per share from 2023 to 2024 (US$10.23 to US$10.12) did not prevent the P/OP ratio from reaching its highest point, indicating the share price increase was the dominant factor in 2024. The increase in operating profit per share in 2025, coupled with the share price decrease, resulted in a lower P/OP ratio.
- Ratio Volatility
- The P/OP ratio experienced considerable volatility, particularly between 2023 and 2025. The ratio increased by approximately 18% from 2023 to 2024, then decreased by approximately 29% from 2024 to 2025. This suggests a degree of sensitivity to market conditions or company-specific news.
In summary, the P/OP ratio’s movements were influenced by both the share price and operating profit per share, with the share price appearing to have a more pronounced effect, especially during periods of rapid change. The observed volatility warrants further investigation into the underlying drivers of these fluctuations.
Price to Sales (P/S)
International Business Machines Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenue (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Software & Services | ||||||
| P/S Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of International Business Machines Corp. Annual Report.
4 2025 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The price-to-sales ratio exhibited a generally increasing trend over the observed period, though with some fluctuation. Initial values were consistent before a marked increase, followed by a partial retracement in the most recent year.
- Price-to-Sales Ratio (P/S)
- The P/S ratio remained stable at 1.94 for both 2021 and 2022. A significant increase was then observed in 2023, rising to 2.73. This upward momentum continued into 2024, with the ratio reaching a peak of 3.81. However, in 2025, the P/S ratio decreased to 3.19, indicating a potential moderation in investor valuation of sales.
Share price demonstrated an overall positive trend, though not consistently. The share price increased from US$123.92 in 2021 to US$129.30 in 2022. A more substantial increase occurred between 2022 and 2024, reaching US$257.75. The share price experienced a decline in 2025, settling at US$229.32.
- Sales per Share
- Sales per share showed a modest, consistent increase throughout the period. From US$63.77 in 2021, it rose to US$66.73 in 2022, US$67.48 in 2023, and US$67.68 in 2024. The most significant increase occurred in 2025, reaching US$72.00. This suggests a steady growth in the company’s revenue generation relative to its outstanding shares.
The increase in the P/S ratio from 2022 to 2024 outpaced the growth in sales per share, suggesting that investors were willing to pay a higher premium for each dollar of sales during those years. The subsequent decrease in the P/S ratio in 2025, despite continued growth in sales per share, could indicate a shift in investor sentiment or a reassessment of the company’s growth prospects.
Price to Book Value (P/BV)
International Business Machines Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total IBM stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Software & Services | ||||||
| P/BV Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
BVPS = Total IBM stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of International Business Machines Corp. Annual Report.
4 2025 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The price to book value (P/BV) ratio exhibited fluctuating behavior over the five-year period. Initially, the ratio decreased before increasing substantially, then declining again. This movement correlates with changes in both share price and book value per share.
- Overall Trend
- The P/BV ratio began at 5.90 in 2021, decreased to 5.34 in 2022, then rose significantly to 7.49 in 2023. It peaked at 8.75 in 2024 before falling to 6.59 in 2025. This indicates a period of increasing investor confidence followed by a potential reassessment of the company’s value relative to its net asset value.
- Share Price Influence
- The share price demonstrated an overall upward trend, increasing from US$123.92 in 2021 to US$257.75 in 2024, before decreasing to US$229.32 in 2025. The increase in share price between 2022 and 2024 likely contributed to the rise in the P/BV ratio during that period. The subsequent price decline in 2025 partially explains the decrease in the P/BV ratio.
- Book Value per Share Influence
- Book value per share also increased consistently throughout the period, rising from US$21.02 in 2021 to US$34.80 in 2025. This growth in book value partially offset the impact of share price fluctuations on the P/BV ratio. The increasing book value suggests strengthening net asset value.
- Ratio Dynamics
- The largest increase in the P/BV ratio occurred between 2022 and 2023, coinciding with a substantial increase in share price and a moderate increase in book value per share. The decline in the P/BV ratio in 2025, despite continued growth in book value, suggests that the share price decrease had a more significant impact on the ratio than the book value increase.
In summary, the P/BV ratio’s movement reflects a complex interplay between market sentiment, as indicated by the share price, and the underlying net asset value, as represented by the book value per share. The ratio’s fluctuations suggest changing investor perceptions of the company’s worth.