Investment Thesis for International Business Machines Corp.

Abstract

The working paper is an in-depth financial analysis of International Business Machines (IBM). Our analysis examines the change in IBM’s business from a traditional hardware and software services provider to a cognitive services and cloud platform company. This analysis is combined with our proprietary Discounted Cash Flow (P-DCF) model and a Monte-Carlo simulation. This results in distributions of probable free cash flows. In addition to these quantitative factors, we also examine compensation plans of IBM executives to assess the degree to which the executives’ compensation incentives are aligned with the objective of creating shareholder value.