IBM Stock Price Forecast: International Business Machines Is Exposed To Further Downside

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • The debt load of International Business Machines is worrisome. IBM’s annual sales has been declining since 2011. It will be hard to pare down a total debt of $69.45 billion.
  • IBM had to issue $20 billion in new debt (bond) last year to fund its $34 billion acquisition of Red Hat. This is why IBM’s long-term debt is now more than $52.4 billion.
  • The debt-laden status of IBM plus its lingering inability to reverse the decline in its annual revenue is why its stock is undervalued and under-appreciated.
  • Using debt to grow its cloud business is justified. However, Red Hat is not yet helping cloud revenue grow fast enough to mitigate the decline in IBM’s legacy enterprise business.
  • We can only pray that this pandemic will encourage more companies to subscribe to IBM’s cloud computing solutions.

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IBM Stock Predictions: Revenues Are Bottoming Out

For the 12th straight quarter, International Business Machines Corp. saw its revenue drop compared to the year-earlier period. Total revenue from the quarter fell to $19.6 billion from $22.2 billion, while net income fell slightly to $2.33 billion from $2.38 billion. The consistently diminishing revenues have partially been a result of efforts by CEO Ginny Rometty to transform the business. The company has maintained for years that it would struggle while transforming the business, but actual results have still not occurred. This could change later this year, as the signs are finally there for IBM to start organically growing its revenue after the transformation.

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