Should you sell International Business Machines Corporation or reduce the position?
Calculate what you would remove, what you would retain, and which assumptions support continuing to own it.
Price as of Oct 31, 2026, 11:00 PM UTC (polygon last daily bar) · Evidence through Oct 22, 2026
What has changed in the case for owning it?
Market Ontology's model values International Business Machines Corporation at $156.94 per share against $257.81 (-39.1%). 8 dated developments in the last 45 days reach the position.
| Development | Evidence | Assumption affected | Consequence for the case |
|---|---|---|---|
| Oct 22, 2026 · IBM posts Q3 revenue up 6% led by software and $8 billion nine-month free cash flow | 1 source | software recurring revenue expansion and cash flow generation supporting valuation multiple | Supports the case for owning |
| Oct 22, 2026 · IBM reports Q3 revenue up 6% on software gains and reaches $8 billion nine-month FCF | 1 source | free cash flow expansion and recurring hybrid software growth | Supports the case for owning |
| Oct 22, 2026 · IBM delivers 6% Q3 revenue growth and generates $8B nine-month free cash flow | 1 source | free cash flow expansion via enterprise software and mainframe transaction growth | Supports the case for owning |
| Oct 22, 2026 · IBM posts 6% Q3 revenue growth as structural cash flow hits $8 billion | 1 source | free cash flow expansion and recurring software margin durability | Supports the case for owning |
| Oct 22, 2026 · IBM Q3 software growth and cash flow support mainframe demand | 1 source | software growth, transaction-processing demand, and free cash flow support valuation stability | Supports the case for owning |
What changes if you sell?
| Keep current position | Sell selected quantity | Exit position | |
|---|---|---|---|
| Shares remaining | 100 | 50 | 0 |
| Estimated proceeds after included transaction costs | — | $12,884 | $25,768 |
| Downside case ($105.45) outcome | −$15,236 | −$7,618 | $0 |
| Upside case ($225.62) outcome | −$3,219 | −$1,610 | $0 |
| Remaining exposure | $25,781 | $12,891 | $0 |
Included costs: an assumed 5 bps for commission and spread. Tax treatment: not calculated; cost basis is not used in this comparison.
Undecided: sale proceeds and remaining exposure are calculated; replacement performance is left unresolved.
What would justify keeping the remaining position?
- Revenue growth (yr 1) holds near 3.72%: Trailing 4-year revenue CAGR of 3.7%, faded toward terminal growth over 5 years.
- Operating margin (steady-state) holds near 15%: Anchored to mean operating margin of 15.0% across the last 0 reported periods.
- Discount rate (WACC) holds near 9.5%: CAPM baseline: 4.98% risk-free + β0.82 × 5.5% ERP = 9.50%.
What would justify investigating it again after an exit?
- Implied revenue growth (next yr → terminal) moves relative to 23.79%: Growth rate that reconciles the current share price to a 5y DCF holding margin, WACC and terminal g fixed.
- Implied steady-state FCF margin moves relative to 28.06%: FCF margin the market needs to justify the current price at modeled growth and WACC.
- The price falls below the downside value of $105.45.
Preserve the reasoning behind the sale.
Save the reduction you're considering, the evidence behind it, and your conditions for reviewing the remaining position. If you exit, keep the research and specify what would justify revisiting IBM.
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