IBM’s Strategic Initiatives, Part 2: How Much Value Can Be Added To IBM’s Stock Due To strategic Initiatives?
International Business Machine (NYSE:IBM) reported that its annualised revenue run rate from its strategic initiatives, which includes analytics, cloud, mobile, security and social, was $31 billion in Q2. In Part 1 of this article, we estimated that IBM’s strategic initiatives will add $18 billion to topline and $3.49 to EBITDA. Based on the total addressable market (TAM) and incremental free-cash-flow (FCF) from new revenue, we expect that IBM stock value can be $33.58 higher. For our calculation uses IBM’s weighted average cost of capital (9.75%) as the discount rate. Our calculation is as follows:
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Have more questions about IBM? See the links below.
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