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Today we're going to take a look at the well-established International Business Machines Corporation (NYSE:IBM). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at International Business Machines’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for International Business Machines
Is International Business Machines Still Cheap?
Good news, investors! International Business Machines is still a bargain right now. According to my valuation, the intrinsic value for the stock is $181.80, but it is currently trading at US$143 on the share market, meaning that there is still an opportunity to buy now. International Business Machines’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will International Business Machines generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for International Business Machines. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since IBM is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on IBM for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IBM. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.