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Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
International Business Machines's Degree of Operating Leverage for the quarter that ended in Jun. 2026 was 6.72. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for International Business Machines's Degree of Operating Leverage or its related term are showing as below:
CHIX:IBMd's Degree of Operating Leverage is ranked worse than 83% of 2711
companies
in the Software industry
Industry Median: 0.65
vs CHIX:IBMd: 6.72
International Business Machines (CHIX:IBMd) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
International Business Machines Degree of Operating Leverage Related Terms
International Business Machines Degree of Operating Leverage Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
International Business Machines Degree of Operating Leverage Chart
CHIX:IBMD vs ACN, CTSH, FISV: Degree of Operating Leverage Comparison
For the Information Technology Services subindustry, International Business Machines's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
International Business Machines Degree of Operating Leverage vs Software Industry
For the Software industry and Technology sector, International Business Machines's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where International Business Machines's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 6.72 mean?
International Business Machines (CHIX:IBMD) has a Degree of Operating Leverage of 6.72 as of Jun. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for International Business Machines and its competitors. According to the industry distribution chart, International Business Machines ranks #2250 out of 2711 companies in the Software industry, placing it in the top 83%.
Is International Business Machines' Degree of Operating Leverage too high?
International Business Machines' current Degree of Operating Leverage is 6.72. The Software industry median Degree of Operating Leverage is 0.65. International Business Machines' value of 6.72 is 933.8% above this industry median. Based on the distribution chart, International Business Machines ranks #2250 out of 2711 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, International Business Machines has a GF Score™ of 64/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does International Business Machines' Degree of Operating Leverage compare to ACN and CTSH?
According to the Software industry distribution chart, International Business Machines ranks #2250 out of 2711 companies for Degree of Operating Leverage. This places International Business Machines in the lower half of its industry. The industry median Degree of Operating Leverage is 0.65. International Business Machines' value of 6.72 is 933.8% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Software company?
The median Degree of Operating Leverage among Software companies is 0.65, based on 2,711 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. International Business Machines's current Degree of Operating Leverage of 6.72 is 933.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for International Business Machines and its competitors. For the Software industry, the median Degree of Operating Leverage is 0.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. International Business Machines's current Degree of Operating Leverage is 6.72. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is International Business Machines stock overvalued right now?
Based on GuruFocus' analysis, International Business Machines (CHIX:IBMD) is currently considered Fairly Valued. The stock's GF Value™ is €210.39, compared to a current price of €203.00 — trading 3.5% below its estimated fair value. The current Degree of Operating Leverage is 6.72 and 933.8% above the Software industry median of 0.65. International Business Machines' overall GF Score™ is 64/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For International Business Machines (CHIX:IBMD), the current Degree of Operating Leverage is 6.72 as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is International Business Machines (CHIX:IBMD) Overvalued in 2026?
Based on GuruFocus' analysis, International Business Machines stock appears to be undervalued.
The current stock price of €203.00 is trading 3.5% below its estimated GF Value™ of €210.39.
GuruFocus considers International Business Machines to be Fairly Valued.
Key valuation signals for CHIX:IBMD:
Degree of Operating Leverage: 6.72
GF Value™: €210.39 vs. price of €203.00 (3.5% below fair value)
Industry Position: 933.8% above the Software median (#2250 of 2711)
No single metric tells the full story. See the CHIX:IBMD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Incorporated in 1911, International Business Machines, or IBM, is one of the oldest technology companies in the world. It provides software, IT consulting services, and hardware to help business customers modernize their technology workflows. IBM operates in 175 countries and employs approximately 300,000 people. The company has a robust roster of business partners to service its clients, which includes 95% of all Fortune 500 companies. IBM's products, including Red Hat, watsonx, and mainframes, handle some of the world's most important data workloads in areas like finance and retail.
64GF Score
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