Latest news with #IBMZ
Business Insider
5 days ago
- Business
- Business Insider
‘Don't Be Afraid to Buy IBM Stock Right Now,' Says Five-Star Analyst
Five-star Bank of America analyst Wamsi Mohan kept a Buy rating on IBM (IBM) and set a price target of $270 after saying that the tech company is a safe investment with expected growth ahead. Indeed, he believes that IBM will grow its revenue and cash flow, which could help fund more mergers and acquisitions in the future. In his note, Mohan focused on transaction processing (TP) software, a key part of IBM's mainframe systems, which has not only stabilized but is now growing again, even in today's cloud-focused tech world. Confident Investing Starts Here: Mohan explained that TP software makes up about one-third of IBM's total software revenue, earning between $5 billion and $7 billion per year, with most of this coming from IBM Z mainframe systems. In addition, growth in this area is being driven by new pricing models, technological improvements, and high demand for reliable systems that are used in critical business operations. Mohan also pointed out that many IBM Z customers are increasing their usage in order to handle more digital transactions, which has boosted IBM's recurring software revenue. Interestingly, while Red Hat has been a major driver of growth for IBM, TP software is also becoming more important. In fact, IBM expects this part of the business to grow by mid-single digits, while the total software segment is expected to grow by about 10%. It is worth noting that IBM has added features like WatsonX AI and switched to more flexible subscription pricing, which has helped more customers sign on and stay longer. As a result, these strategies are helping IBM grow both usage and revenue by making the software a deeper part of customers' businesses, according to Mohan. What Is the Target Price for IBM? Turning to Wall Street, analysts have a Moderate Buy consensus rating on IBM stock based on eight Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average IBM price target of $260.62 per share implies 0.7% upside potential.
Yahoo
5 days ago
- Business
- Yahoo
IBM's TP Software Stays 'Extremely Relevant' To Growth, Even In The Public Cloud Age: Analyst
On Wednesday, B Of A securities analyst Wamsi Mohan maintained a Buy rating on International Business Machines (NYSE:IBM) with a price forecast of $270. The rating reflects the analyst's view that the company is a defensive investment and anticipates improving revenue growth that should, in turn, generate higher cash flow available for reinvestment in further mergers and acquisitions. In an analyst note that focused on IBM's transaction processing (TP) software, a critical component of its mainframe operations, Mohan noted TP software has not only stabilized but is now demonstrating significant growth staying extremely relevant in the age of public growth is driven by strategic innovation, evolving pricing models, and the enduring demand for its unparalleled reliability in mission-critical operations. The analyst noted that TP software contributes approximately one-third of the company's total Software segment revenue (over 90% comes from IBM Z/mainframe environments) and generated annual revenues ranging from the mid-$5 billion to over $7 billion over the past decade. Several factors contribute to the growth of IBM's TP software, including increased mainframe workloads and innovative pricing models. He asserted in an analyst note that these drivers ensure that IBM remains competitive in the evolving IT landscape. While Red Hat has often been the primary focus for growth (exhibiting mid-teens growth), TP remains critically important to IBM's overall revenue expansion and profitability, Mohan noted. He further said that the company projects this business to achieve mid-single-digit growth, compared to an expected 10% growth for the entire Software segment. Also, WatsonX integration and innovative pricing strategies have driven greater adoption and improved retention for IBM's TP software, enhancing its overall stickiness within enterprise environments, he added. Moreover, the analyst said several IBM Z customers are scaling MIPS to meet rising digital transaction demands, with 70% increasing usage, boosting recurring software revenue. In 2024, IBM noted about 4 points of transaction processing revenue growth came from higher workload consumption fueled by mobile banking, e-commerce, and data-driven activity. Mohan added that IBM's Enterprise License Agreement (ELA) approach for its TP software has been central to boosting its adoption and financial consistency. Overall, the analyst believes that ELAs have strengthened IBM's capacity to retain clients and consistently grow transaction processing revenue by deeply integrating IBM's software into customer operations and strategic planning. Regarding pricing trends, Mohan said that IBM has transitioned its TP software pricing from rigid capacity-based billing to more flexible, subscription-style models. By combining modest price increases with modern options like Tailored Fit Pricing (TFP) and Enterprise License Agreements (ELAs), IBM has reduced cost barriers and encouraged greater usage. Mohan added that this shift has supported both higher unit pricing and volume growth. Investors can gain exposure to the stock via First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV) and FT Vest Technology Dividend Target Income ETF (BATS:TDVI). Price Action: IBM shares are trading lower by 0.86% to $258.01 at last check Thursday. Read Next:Photo via Shutterstock Date Firm Action From To Jan 2022 BMO Capital Maintains Market Perform Jan 2022 UBS Downgrades Neutral Sell Jan 2022 Goldman Sachs Initiates Coverage On Neutral View More Analyst Ratings for IBM View the Latest Analyst Ratings UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? IBM (IBM): Free Stock Analysis Report This article IBM's TP Software Stays 'Extremely Relevant' To Growth, Even In The Public Cloud Age: Analyst originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
13-05-2025
- Business
- Business Wire
ColeSoft Signs Reseller Agreement with UK-Based Mainframe IT Leader Vertali
NEW YORK--(BUSINESS WIRE)-- ColeSoft, an Izzi Software company, today announced that it has inked a global reseller deal with Vertali for its z/XDC product, the leading debugging tool purpose-built for mainframe systems. This is the first-ever reseller agreement signed by ColeSoft, which was acquired by Izzi Software in 2024. z/XDC will be bundled with technologies from leading mainframe technology companies to help Vertali's customers solve their biggest business and technical challenges. Andrew Penlington, Channel Partner Manager at Vertali, says that, 'It is impossible to overstate the importance of debugging as early in the development process as possible, and ColeSoft has a 30+ year track record of helping organizations get their products to market faster while reducing errors that can cost organizations time and money. We have never had a product like this in our arsenal, and Vertali couldn't be happier to work with Dave Cole and his amazing team to add this critical capability to our stack.' Calin Cole, President of ColeSoft, says, 'Debugging is often seen as a way to fix problems that pop up in the development process, but it's much more fundamental than that - it's about preventing structural problems that can delay or destroy the ability to build and release products on time and on budget. Vertali has built a world-class suite of services and products for the mainframe world, and we are honored to have been selected as their debugging tool of choice to help major organizations that depend on IBM Z optimize their operations.' About Izzi Software Izzi Software was founded by experienced M&A experts and is led by a team with deep expertise in the IBM i and IBM z environments. The company is owned by Big Band, which has an impressive track record in buying and running B2B SaaS businesses that are growing and profitable, with ARR in the range of $2M to $10M. Izzi acquired ColeSoft, which was founded in 1982, in 2024. About Vertali Headquartered in the UK, Vertali provides mainframe services, skills, resources, and software to organizations globally. Working for clients in sectors such as financial services, retail, utilities and government, its consulting approach blends unparalleled expertise with many years' hands-on experience. It offers a pool of skills that are not available anywhere else, including mainframe consultants, security experts, and other senior practitioners. Vertali's stated mission is to help clients to reduce risk, work smarter, and deliver on their mainframe strategy.
Business Insider
08-05-2025
- Business
- Business Insider
IBM Expands Its Hybrid Cloud and AI Capabilities with CockroachDB Integration
Earlier today, Cockroach Labs announced that its main product, CockroachDB, will now support tech company IBM's (IBM) LinuxONE and IBM Z systems, which use the s390x processor. This will bring CockroachDB's ability to scale and handle data across multiple systems to some of the most secure and reliable platforms used by big industries. IBM customers can now use CockroachDB alongside their existing systems for hybrid cloud and AI projects. This is especially helpful for highly regulated industries like banking and healthcare, where security and compliance are very important. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Interestingly, CockroachDB is built to manage critical tasks without interruptions. Indeed, its system copies data across many servers, so even if some servers go down, the system keeps running. Running CockroachDB on IBM's architecture improves this even more by adding IBM's strong security and performance features. This makes it a good fit for important jobs like processing payments or managing user accounts. Developers can also use CockroachDB's PostgreSQL-compatible interface and easily scale across IBM systems as demand grows. On top of reliability and scalability, CockroachDB also offers flexibility and strong security by working across both on-site servers and cloud environments. This lets businesses store data where it makes the most sense without extra work. In addition, running on IBM's platforms adds powerful encryption and secure key management capabilities, which further protect sensitive data. Cockroach Labs said this partnership with IBM fits into its plan to help companies modernize their operations while keeping important data safe and always available. What Is the Target Price for IBM? Turning to Wall Street, analysts have a Moderate Buy consensus rating on IBM stock based on eight Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average IBM price target of $258.79 per share implies 2.7% upside potential.
Yahoo
24-04-2025
- Business
- Yahoo
International Business Machines Corp (IBM) Q1 2025 Earnings Call Highlights: Strong Software ...
Revenue: $14.5 billion, up 2% at constant currency. Adjusted EBITDA: $3.4 billion, with a 240 basis points margin expansion. Operating Pre-tax Income: $1.7 billion. Operating Earnings Per Share: $1.60. Free Cash Flow: $2 billion, the highest first quarter free cash flow in many years. Software Revenue Growth: Up 9%, with Red Hat up 13% and Automation up 15%. Annual Recurring Revenue (ARR) for Software: $21.7 billion, up 11% year-over-year. Consulting Revenue: Flat, with a mid-single digit backlog growth. Infrastructure Revenue: Declined 4%, with IBM Z down 14%. Debt Balance: Over $63 billion, including $10 billion for the financing business. Cash Position: $17.6 billion, up $2.8 billion from the end of 2024. Full Year Guidance: Maintaining revenue growth of 5%-plus and about $13.5 billion of free cash flow. Warning! GuruFocus has detected 3 Warning Sign with CCS. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. International Business Machines Corp (NYSE:IBM) reported strong revenue growth, profitability, and cash flow generation, exceeding expectations for the first quarter of 2025. The company's Software segment grew by 9%, with notable strength in Red Hat, Automation, Data, and Transaction Processing. IBM's generative AI business saw significant traction, with a book of business now over $6 billion, up by $1 billion in the quarter. The upcoming launch of the z17 mainframe is expected to deliver enhanced AI capabilities and new security features, resonating well with clients. IBM's strategic acquisitions, such as HashiCorp, are expected to integrate well with its hybrid cloud strategy, offering synergy opportunities. Consulting revenue was flat, with some clients delaying decision-making, particularly in discretionary projects, impacting in-period signings. Infrastructure revenue declined by 4%, with IBM Z down 14% as the company wrapped up the z16 program. The macroeconomic environment remains uncertain, with potential impacts on client buying behavior and consulting services. IBM's federal consulting business, which is less than 10% of total consulting, could be susceptible to discretionary pullbacks. The company is cautious about the contribution from Consulting for the year, given the current economic conditions. Q: Are you seeing any significant softening in the consumption portion of the Software portfolio, particularly in Red Hat or Transaction Processing? And how is Consulting being impacted by the current macro environment? A: Arvind Krishna, CEO, noted that there was no significant slowdown in the consumption part of the Software business, including Red Hat and Transaction Processing. However, if global GDP slows, there could be a minor impact on Red Hat's consumption business. Consulting is more susceptible to economic pressures, but the impact has been limited so far. James Kavanaugh, CFO, added that the strategic repositioning towards a software-centric model is on track, and Consulting is expected to stabilize. Q: How do you plan to achieve the 5%-plus revenue growth guidance for the full year, especially considering the challenges in Red Hat and Consulting? A: James Kavanaugh, CFO, explained that the growth will be driven by new innovations in infrastructure, contributions from recent acquisitions like HashiCorp, and strong performance in Red Hat. The company expects Red Hat to grow mid-teens for the year, and while Consulting's contribution is expected to be flat, the overall growth drivers remain strong. Q: Can you provide more details on the impact of the federal business and discretionary Consulting projects on your outlook? A: James Kavanaugh, CFO, stated that the US federal business is less than 5% of IBM's total revenue, with 60% being Consulting, which is more susceptible to discretionary pullbacks. However, the impact on the backlog has been minimal. Arvind Krishna, CEO, emphasized that most federal consulting work is mission-critical, reducing the risk of significant impact. Q: What are the dynamics behind the recent performance of the Red Hat business, and how does virtualization play a role? A: James Kavanaugh, CFO, noted that Red Hat grew 13.5% and continues to see strong demand, particularly in virtualization, automation, and Linux capabilities. The consumption-based services moderated to high single digits, but the overall portfolio remains strong. Arvind Krishna, CEO, added that OpenShift is becoming a leading platform for containerization and virtualization, driving long-term growth. Q: With the recent FX changes, why hasn't the free cash flow guidance been adjusted upwards? A: James Kavanaugh, CFO, explained that while FX changes could provide tailwinds, the company is maintaining its $13.5 billion free cash flow guidance due to the dynamic macro environment. The focus remains on disciplined execution and maintaining a strong liquidity position. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
