International Business Machines (XSWX:IBM) Forward PE Ratio Explanation
The Forward PE Ratio of a company is often used to compare current earnings to estimated future earnings, as well as gaining a clearer picture of what earnings will look like without charges and other accounting adjustments. If earnings are expected to grow in the future, the Forward PE Ratio will be lower than the current PE Ratio. This measure is also used to compare one company to another with a forward-looking focus.
Trailing PE Ratio relies on what is already done. It uses the current share price and divides by the total EPS (Basic) over the past 12 months. PE Ratio can be affected by Non Operating Income such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio .
International Business Machines Forward PE Ratio Related Terms
International Business Machines Forward PE Ratio 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 Forward PE Ratio Chart
International Business Machines Annual Data
Trend
2015-12
2016-12
2017-12
2018-12
2019-12
2020-12
2021-12
2022-12
Forward PE Ratio
8.96
11.70
10.79
8.22
10.05
12.82
13.25
15.08
International Business Machines Quarterly Data
2015-12
2016-03
2016-06
2016-09
2016-12
2017-03
2017-06
2017-09
2017-12
2018-03
2018-06
2018-09
2018-12
2019-03
2019-06
2019-09
2019-12
2020-03
2020-06
2020-09
2020-12
2021-03
2021-06
2021-09
2021-12
2022-03
2022-06
2022-09
2022-12
2023-03
2026-03
Forward PE Ratio
8.96
9.76
11.67
11.60
11.70
12.41
11.39
10.41
10.79
11.04
9.71
10.94
8.22
10.10
9.91
10.15
10.05
10.14
12.94
11.81
12.82
12.87
13.19
11.99
13.25
14.73
14.73
13.68
15.08
15.02
20.10
XSWX:IBM vs ACN, FISV, FIS: Forward PE Ratio Comparison
For the Information Technology Services subindustry, International Business Machines's Forward PE Ratio, along with its competitors' market caps and Forward PE Ratio 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 Forward PE Ratio vs Software Industry
For the Software industry and Technology sector, International Business Machines's Forward PE Ratio distribution charts can be found below:
* The bar in red indicates where International Business Machines's Forward PE Ratio falls into.
International Business Machines Forward PE Ratio Calculation
It's a measure of the price-to-earnings ratio (PE Ratio) using forecasted earnings for the calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there is still benefit in estimated P/E analysis. The forecasted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period.
International Business Machines (XSWX:IBM) has a Forward PE Ratio of 23.16 as of Jul. 06, 2026. Forward P/E ratio is the share price dividend by the expected per-share earnings in the next 12 months. View historical data on International Business Machines and its competitors. According to the industry distribution chart, International Business Machines ranks #719 out of 1167 companies in the Software industry, placing it in the top 61.6%.
Is International Business Machines' Forward PE Ratio too high?
International Business Machines' current Forward PE Ratio is 23.16. The Software industry median Forward PE Ratio is 18.50. International Business Machines' value of 23.16 is 25.2% above this industry median. Based on the distribution chart, International Business Machines ranks #719 out of 1167 companies in the Software industry, which is below the industry midpoint. Overall, International Business Machines has a GF Score™ of 69/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does International Business Machines' Forward PE Ratio compare to ACN and FISV?
According to the Software industry distribution chart, International Business Machines ranks #719 out of 1167 companies for Forward PE Ratio. This places International Business Machines in the lower half of its industry. The industry median Forward PE Ratio is 18.50. International Business Machines' value of 23.16 is 25.2% 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 Forward PE Ratio for a Software company?
The median Forward PE Ratio among Software companies is 18.50, based on 1,167 companies in the industry. Companies in the top quartile (top 25%) have a Forward PE Ratio significantly above this median, while those in the bottom quartile fall well below. However, Forward PE Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. International Business Machines's current Forward PE Ratio of 23.16 is 25.2% 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 Forward PE Ratio mean?
A high Forward PE Ratio can signal that a stock is expensive relative to its fundamentals. Forward P/E ratio is the share price dividend by the expected per-share earnings in the next 12 months. View historical data on International Business Machines and its competitors. For the Software industry, the median Forward PE Ratio is 18.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. International Business Machines's current Forward PE Ratio is 23.16. 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 (XSWX:IBM) is currently considered Modestly Overvalued. The stock's GF Value™ is CHF187.83, compared to a current price of CHF230.15 — trading 22.5% above its estimated fair value. The current Forward PE Ratio is 23.16 and 25.2% above the Software industry median of 18.50. International Business Machines' overall GF Score™ is 69/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward PE Ratio calculated?
Forward PE Ratio is calculated from a company's financial statements. For International Business Machines (XSWX:IBM), the current Forward PE Ratio is 23.16 as of Jul. 06, 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 (XSWX:IBM) Overvalued in 2026?
Based on GuruFocus' analysis, International Business Machines stock appears to be overvalued.
The current stock price of CHF230.15 is trading 22.5% above its estimated GF Value™ of CHF187.83.
GuruFocus considers International Business Machines to be Modestly Overvalued.
Key valuation signals for XSWX:IBM:
Forward PE Ratio: 23.16
GF Value™: CHF187.83 vs. price of CHF230.15 (22.5% above fair value)
Industry Position: 25.2% above the Software median (#719 of 1167)
No single metric tells the full story. See the XSWX:IBM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
International Business Machines Business Description
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.
69GF Score
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Forward PE Ratio is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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