MICROSOFT CORP (1MSFT.MI) Stock Fundamental Analysis
Europe - BIT:1MSFT - US5949181045 - Common Stock
443.7 EUR
-6.3 (-1.4%)
We assign a fundamental rating of 7 out of 10 to 1MSFT. 1MSFT was compared to 111 industry peers in the Software industry. 1MSFT gets an excellent profitability rating and is at the same time showing great financial health properties. 1MSFT is valied quite expensively at the moment, while it does show a decent growth rate. These ratings could make 1MSFT a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year 1MSFT was profitable.
In the past year 1MSFT had a positive cash flow from operations.
In the past 5 years 1MSFT has always been profitable.
1MSFT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
1MSFT has a better Return On Assets (16.45%) than 91.74% of its industry peers.
The Return On Equity of 1MSFT (29.65%) is better than 87.16% of its industry peers.
With an excellent Return On Invested Capital value of 22.08%, 1MSFT belongs to the best of the industry, outperforming 91.74% of the companies in the same industry.
1MSFT had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 12.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.45% | ||
| ROE | 29.65% | ||
| ROIC | 22.08% |
ROA(3y)17.07%
ROA(5y)17.9%
ROE(3y)32.52%
ROE(5y)36.88%
ROIC(3y)22.94%
ROIC(5y)23.52%
1.3 Margins
Looking at the Profit Margin, with a value of 36.15%, 1MSFT belongs to the top of the industry, outperforming 93.58% of the companies in the same industry.
In the last couple of years the Profit Margin of 1MSFT has grown nicely.
The Operating Margin of 1MSFT (45.62%) is better than 95.41% of its industry peers.
In the last couple of years the Operating Margin of 1MSFT has grown nicely.
The Gross Margin of 1MSFT (68.82%) is comparable to the rest of the industry.
1MSFT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.62% | ||
| PM (TTM) | 36.15% | ||
| GM | 68.82% |
OM growth 3Y2.75%
OM growth 5Y4.26%
PM growth 3Y-0.49%
PM growth 5Y3.14%
GM growth 3Y0.21%
GM growth 5Y0.31%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 1MSFT is creating value.
Compared to 1 year ago, 1MSFT has about the same amount of shares outstanding.
1MSFT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, 1MSFT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 10.08 indicates that 1MSFT is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 10.08, 1MSFT belongs to the top of the industry, outperforming 88.07% of the companies in the same industry.
The Debt to FCF ratio of 1MSFT is 1.25, which is an excellent value as it means it would take 1MSFT, only 1.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of 1MSFT (1.25) is better than 76.15% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that 1MSFT is not too dependend on debt financing.
The Debt to Equity ratio of 1MSFT (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 10.08 |
ROIC/WACC1.98
WACC11.13%
2.3 Liquidity
1MSFT has a Current Ratio of 1.35. This is a normal value and indicates that 1MSFT is financially healthy and should not expect problems in meeting its short term obligations.
1MSFT's Current ratio of 1.35 is in line compared to the rest of the industry. 1MSFT outperforms 51.38% of its industry peers.
A Quick Ratio of 1.35 indicates that 1MSFT should not have too much problems paying its short term obligations.
1MSFT has a Quick ratio (1.35) which is in line with its industry peers.
1MSFT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.50% over the past year.
Measured over the past years, 1MSFT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.86% on average per year.
The Revenue has grown by 14.93% in the past year. This is quite good.
The Revenue has been growing by 14.52% on average over the past years. This is quite good.
EPS 1Y (TTM)15.5%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%23.73%
Revenue 1Y (TTM)14.93%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.1%
3.2 Future
Based on estimates for the next years, 1MSFT will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.23% on average per year.
1MSFT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.67% yearly.
EPS Next Y15.9%
EPS Next 2Y16.5%
EPS Next 3Y17.55%
EPS Next 5Y15.23%
Revenue Next Year15.55%
Revenue Next 2Y15.01%
Revenue Next 3Y15.13%
Revenue Next 5Y12.67%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 37.63, which means the current valuation is very expensive for 1MSFT.
65.14% of the companies in the same industry are more expensive than 1MSFT, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.02, 1MSFT is valued a bit more expensive.
1MSFT is valuated quite expensively with a Price/Forward Earnings ratio of 32.47.
1MSFT's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of 1MSFT to the average of the S&P500 Index (22.57), we can say 1MSFT is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.63 | ||
| Fwd PE | 32.47 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1MSFT is on the same level as its industry peers.
1MSFT's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.28 | ||
| EV/EBITDA | 23.02 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of 1MSFT may justify a higher PE ratio.
1MSFT's earnings are expected to grow with 17.55% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.37
PEG (5Y)2
EPS Next 2Y16.5%
EPS Next 3Y17.55%
5. Dividend
5.1 Amount
1MSFT has a yearly dividend return of 0.70%, which is pretty low.
1MSFT's Dividend Yield is rather good when compared to the industry average which is at 2.10. 1MSFT pays more dividend than 80.73% of the companies in the same industry.
With a Dividend Yield of 0.70, 1MSFT pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
On average, the dividend of 1MSFT grows each year by 10.24%, which is quite nice.
Dividend Growth(5Y)10.24%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
23.65% of the earnings are spent on dividend by 1MSFT. This is a low number and sustainable payout ratio.
The dividend of 1MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.65%
EPS Next 2Y16.5%
EPS Next 3Y17.55%
BIT:1MSFT (10/10/2025, 7:00:00 PM)
443.7
-6.3 (-1.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.31%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap3298.10B
Analysts85.71
Price Target525.17 (18.36%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
Yearly Dividend2.8
Dividend Growth(5Y)10.24%
DP23.65%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.77%
Min EPS beat(2)5.34%
Max EPS beat(2)6.2%
EPS beat(4)4
Avg EPS beat(4)4.44%
Min EPS beat(4)1.79%
Max EPS beat(4)6.2%
EPS beat(8)7
Avg EPS beat(8)4.04%
EPS beat(12)10
Avg EPS beat(12)3.55%
EPS beat(16)12
Avg EPS beat(16)3.12%
Revenue beat(2)2
Avg Revenue beat(2)0.97%
Min Revenue beat(2)0.4%
Max Revenue beat(2)1.54%
Revenue beat(4)2
Avg Revenue beat(4)0.21%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)1.54%
Revenue beat(8)3
Avg Revenue beat(8)0.03%
Revenue beat(12)4
Avg Revenue beat(12)-0.18%
Revenue beat(16)5
Avg Revenue beat(16)-0.36%
PT rev (1m)-0.65%
PT rev (3m)15.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.89%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)2.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.89%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.63 | ||
| Fwd PE | 32.47 | ||
| P/S | 13.54 | ||
| P/FCF | 53.28 | ||
| P/OCF | 28.02 | ||
| P/B | 11.11 | ||
| P/tB | 18.95 | ||
| EV/EBITDA | 23.02 |
EPS(TTM)11.79
EY2.66%
EPS(NY)13.67
Fwd EY3.08%
FCF(TTM)8.33
FCFY1.88%
OCF(TTM)15.84
OCFY3.57%
SpS32.76
BVpS39.95
TBVpS23.42
PEG (NY)2.37
PEG (5Y)2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.45% | ||
| ROE | 29.65% | ||
| ROCE | 26.9% | ||
| ROIC | 22.08% | ||
| ROICexc | 27.53% | ||
| ROICexgc | 43.75% | ||
| OM | 45.62% | ||
| PM (TTM) | 36.15% | ||
| GM | 68.82% | ||
| FCFM | 25.42% |
ROA(3y)17.07%
ROA(5y)17.9%
ROE(3y)32.52%
ROE(5y)36.88%
ROIC(3y)22.94%
ROIC(5y)23.52%
ROICexc(3y)31.07%
ROICexc(5y)36.94%
ROICexgc(3y)52.63%
ROICexgc(5y)67.5%
ROCE(3y)28.11%
ROCE(5y)28.75%
ROICexcg growth 3Y-18.02%
ROICexcg growth 5Y-15.78%
ROICexc growth 3Y-12.77%
ROICexc growth 5Y-10.15%
OM growth 3Y2.75%
OM growth 5Y4.26%
PM growth 3Y-0.49%
PM growth 5Y3.14%
GM growth 3Y0.21%
GM growth 5Y0.31%
F-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 189.01% | ||
| Cap/Sales | 22.91% | ||
| Interest Coverage | 80.33 | ||
| Cash Conversion | 83.7% | ||
| Profit Quality | 70.32% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 10.08 |
F-Score5
WACC11.13%
ROIC/WACC1.98
Cap/Depr(3y)197.12%
Cap/Depr(5y)186.6%
Cap/Sales(3y)18.11%
Cap/Sales(5y)15.73%
Profit Quality(3y)78.85%
Profit Quality(5y)83.54%
High Growth Momentum
Growth
EPS 1Y (TTM)15.5%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%23.73%
EPS Next Y15.9%
EPS Next 2Y16.5%
EPS Next 3Y17.55%
EPS Next 5Y15.23%
Revenue 1Y (TTM)14.93%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.1%
Revenue Next Year15.55%
Revenue Next 2Y15.01%
Revenue Next 3Y15.13%
Revenue Next 5Y12.67%
EBIT growth 1Y17.45%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year51.87%
EBIT Next 3Y27.27%
EBIT Next 5Y25.57%
FCF growth 1Y-3.32%
FCF growth 3Y3.2%
FCF growth 5Y9.62%
OCF growth 1Y14.86%
OCF growth 3Y15.21%
OCF growth 5Y17.55%