Results for: IBM

IBM has agreed to acquire cloud software provider HashiCorp for $35 per share in cash, valuing the deal at $6.4 billion net of cash. The acquisition is expected to be accretive to IBM’s earnings and cash flow in the future. However, IBM’s first-quarter revenue fell short of analysts’ estimates, marking the third revenue miss in the past five quarters. Revenue from software, consulting, and infrastructure services all came in below expectations, despite an increase in overall revenue of around 1.5% year-over-year. IBM shares dipped 3% in extended trading after the announcement.

IBM has reported solid revenue and free cash flow growth in the first quarter of 2024, driven by the strength of its hybrid cloud and AI strategy. The company’s book of business for Watsonx and generative AI continues to show strong momentum, with growth quarter over quarter. IBM is also strengthening its position in the hybrid cloud and AI-driven technology landscape by acquiring HashiCorp, Inc. The acquisition is expected to create a comprehensive end-to-end hybrid cloud platform for the AI era. IBM remains committed to investing in growth opportunities and returning value to shareholders through its dividend.

Cloud infrastructure automation platform HashiCorp’s shares surged 10% after reports emerged that tech giant IBM is finalizing a deal to acquire the company. Sources indicate a deal could be reached as early as Wednesday, April 24, 2024. This corroborates an earlier report from the Wall Street Journal suggesting a potential deal between IBM and HashiCorp. However, BTIG analyst downgraded HashiCorp to Neutral due to uncertainty surrounding the deal’s completion and the typical approval and closing process, which could take six to nine months. Despite the news, HashiCorp’s shares are known for their volatility, with 19 moves greater than 5% over the past year. The stock’s biggest move in the past year was a 25.6% drop after the company reported first-quarter results that beat analysts’ estimates but lowered full-year guidance.

HashiCorp has been downgraded to Neutral from Buy by BTIG after its recent run-up following merger and acquisition speculation. While a deal with IBM remains uncertain, analysts at Bank of America Securities believe HashiCorp’s public cloud management suite could be a valuable addition to IBM’s software and cloud capabilities. The bank has increased its price target on HashiCorp to $32 from $28. A deal with IBM could be announced as early as today, as the company is scheduled to report its first-quarter results after the close of trading.

Oracle and IBM, two tech giants with market caps of $315.75 billion and $166.46 billion, respectively, were thoroughly analyzed in this research. Our key focus was on their revenue growth, profitability, and financial position due to their established presence in the software sector, characterized by stable revenue growth, profit margins, and increased debt capacity. Oracle outperforms IBM in all three areas. In terms of revenue growth, Oracle has a higher growth rate in all segments except Technology Hardware, Storage & Peripherals, with a particularly strong performance in IT Consulting & Other Services, boosted by its Cerner acquisition. Oracle also holds a larger market share in software, most notably in database software, and has a greater data center presence in the cloud market. It benefits from its specialized IT consulting activities that support its organic growth strategy. In terms of profitability, Oracle consistently maintains higher margins than IBM across gross, EBIT, net, and FCF margins. It also demonstrates better profitability ratios in terms of ROA, ROCE, and ROE, reflecting its more efficient use of assets and capital. Financially, Oracle is expected to improve its net debt and cash-to-debt ratio, supported by stronger cash flows compared to IBM. Oracle’s robust liquidity ratios position it well to meet short-term obligations. This comprehensive analysis highlights Oracle’s strong position compared to IBM and supports a Buy rating, with an updated price target of $137.83.

Evercore ISI has reaffirmed its positive outlook on IBM shares, maintaining an Outperform rating and a price target of $215.00. The firm anticipates IBM’s upcoming quarterly earnings call to highlight the company’s strength in the Hybrid Cloud Platform (HCP) and Artificial Intelligence (AI), which are expected to drive growth. The call may also provide insights into IBM’s strategy and performance in the first quarter. Investors are awaiting further details on the company’s financial performance and strategic initiatives.

IBM is reportedly in discussions to acquire cloud software company Hashicorp Inc, sending its stock soaring by 22%. The potential deal, which could materialize within days, would bolster IBM’s cloud offerings and enhance Hashicorp’s market reach.

HashiCorp shares surged on Tuesday after media reports speculated about a potential acquisition by tech giant IBM. The cloud software provider’s stock climbed as much as 26% amid the buzz. HashiCorp’s services enable developers to manage infrastructure on public clouds operated by companies like Amazon and Microsoft.

IBM is set to release its first-quarter earnings report on April 24th, with analysts anticipating earnings per share of $1.59 and revenues of $14.54 billion. While concerns exist about potential weakness in the consulting business, analysts remain optimistic, citing improving macro and IT spending data points. The company’s AI business is expected to be a key focus for investors as enterprises increasingly adopt AI tools to enhance productivity. IBM’s revenue is also likely to benefit from the recent sale of Weather Company assets.

UBS has raised IBM’s price target to $130 while maintaining a Sell rating. This adjustment follows IBM’s recent sale of its Weather business and revisions to its segment reporting. UBS has revised its revenue growth and profit margin forecasts, particularly for the Software and Consulting segments. Despite the revisions, IBM remains a significant player in the IT Services industry, with a track record of consistent dividend increases and low price volatility.