IB Net Payout Yields Model

IBM: Next Step

Along with reporting Q4 results, IBM (IBM) reported the next step in returning to growth. The stock never belonged below $120.
 The technology giant reported the following results for Q4'18:
  • Non-GAAP EPS of $4.87 beats by $0.05.
  • Revenue of $21.76B (-3.5% Y/Y) beats by $30M.
IBM typically beats estimates so the issue is forward guidance. For 2019, the company made this key forecast after earning $13.81 per share in 2018:
  • EPS of at least $13.90
  • FCF of $12B
All of these numbers exclude any impact from Red Hat (RHT) that should close in the 2H of the year.  IBM finally returning to EPS growth is a big step in the right direction and a reason why the stock is up above $130 today.

Disclosure: Long IBM. Please review the disclaimer page for more details. 


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