ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. International Business Machines's annualizedNet Income for the quarter that ended in Mar. 2026 was €4,207 Mil.
International Business Machines's average Total Assets over the quarter that ended in Mar. 2026 was €132,422 Mil. Therefore, International Business Machines's annualized ROA % for the quarter that ended in Mar. 2026 was 3.18%.
XBUL:IBM'
s ROA % Range Over the Past 10 Years
Min: 1.27 Med: 5.23 Max: 10.42
Current: 7.18
During the past 13 years, International Business Machines's highest ROA % was 10.42%. The lowest was 1.27%. And the median was 5.23%.
XBUL:IBM's ROA % is ranked better than 73.33% of 2883
companies
in the Software industry
Industry Median: 1.65
vs XBUL:IBM: 7.18
International Business Machines (XBUL:IBM) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
International Business Machines ROA % Related Terms
International Business Machines ROA % 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.
For the Information Technology Services subindustry, International Business Machines's ROA %, along with its competitors' market caps and ROA % 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 ROA % vs Software Industry
For the Software industry and Technology sector, International Business Machines's ROA % distribution charts can be found below:
* The bar in red indicates where International Business Machines's ROA % 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.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Mar. 2026) net income data.
ROA % is displayed in the 30-year financial page.
International Business Machines (XBUL:IBM) has a ROA % of 3.18% as of Mar. 2026. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on International Business Machines and its competitors. This is 39% below median its historical median of 5.23. Over the past decade, International Business Machines' ROA % has ranged from 1.27 to 10.42. According to the industry distribution chart, International Business Machines ranks #769 out of 2883 companies in the Software industry, placing it in the top 26.7%.
Is International Business Machines' ROA % too high?
International Business Machines' current ROA % of 3.18% is 39% below median its 10-year median of 5.23. Over the past 10 years, this metric has ranged from a low of 1.27 to a high of 10.42. The Software industry median ROA % is 1.65. International Business Machines' value of 3.18% is 92.7% above this industry median. Based on the distribution chart, International Business Machines ranks #769 out of 2883 companies in the Software industry, which is above the industry midpoint. Overall, International Business Machines has a GF Score™ of 76/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does International Business Machines' ROA % compare to ACN and FISV?
According to the Software industry distribution chart, International Business Machines ranks #769 out of 2883 companies for ROA %. This puts International Business Machines in the upper half of its industry. The industry median ROA % is 1.65. International Business Machines' value of 3.18% is 92.7% above this benchmark. Historically, International Business Machines' own ROA % has ranged from 1.27 to 10.42 over the past decade. While the company's 10-year median is 5.23 vs. the industry median of 1.65, International Business Machines has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for a Software company?
The median ROA % among Software companies is 1.65, based on 2,883 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. International Business Machines's current ROA % of 3.18% is 92.7% 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 ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on International Business Machines and its competitors. For the Software industry, the median ROA % is 1.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. International Business Machines's current ROA % is 3.18%, which is 39% below median its own 10-year median of 5.23. 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 (XBUL:IBM) is currently considered Modestly Overvalued. The stock's GF Value™ is €191.71, compared to a current price of €232.10 — trading 21.1% above its estimated fair value. The current ROA % is 3.18%, which is 39% below median its 10-year median of 5.23 and 92.7% above the Software industry median of 1.65. International Business Machines' overall GF Score™ is 76/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For International Business Machines (XBUL:IBM), the current ROA % is 3.18% as of Mar. 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 (XBUL:IBM) Overvalued in 2026?
Based on GuruFocus' analysis, International Business Machines stock appears to be overvalued.
The current stock price of €232.10 is trading 21.1% above its estimated GF Value™ of €191.71.
GuruFocus considers International Business Machines to be Modestly Overvalued.
Key valuation signals for XBUL:IBM:
ROA %: 3.18% (39% below median its 10-year median of 5.23)
GF Value™: €191.71 vs. price of €232.10 (21.1% above fair value)
Industry Position: 92.7% above the Software median (#769 of 2883)
No single metric tells the full story. See the XBUL: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.
76GF Score
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