IBM - Embedded Expectations Analysis - 2019 05 02
International Business Machines Corporation (IBM:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 13.7x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about enterprise app and cloud sales growth, operating efficiencies, and their cloud platforms.Specifically, management may lack confidence in their ability to optimize GTS performance by exiting lower-value content, drive productivity in the business, and sustain next-gen enterprise app and cloud revenue growth. In addition, they may be exaggerating operating efficiencies, revenue realization momentum, and tax benefits from their audit settlement. Also, management may lack confidence in their ability to sustain quarterly growth, mitigate large-item growth headwinds, and integrate hybrid cloud management software with data and AI platforms. Additionally, they may be concerned about the sustainability of Linux growth, cloud and hybrid cloud development, and their cash balance.
International Business Machines provides integrated solutions and products that utilize data, information technology, capability in industries and business processes. The company has five segments: Cloud and Cognitive Software, which provides a range of software offerings; Global Business Services, which provides consulting, systems integration, application management and business process outsourcing services; Global Technology Services, which provides project services, managed and outsourcing services, cloud-delivered services, and technical and IT support services; Systems, which provides technology and service; and Global Financing, which provides client financing, among others.
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