MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
Europe - FRA:MSF - US5949181045 - Common Stock
443.85 EUR
-4.95 (-1.1%)
We assign a fundamental rating of 7 out of 10 to MSF. MSF was compared to 111 industry peers in the Software industry. MSF gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, MSF is valued expensive at the moment. This makes MSF very considerable for quality investing!
1. Profitability
1.1 Basic Checks
MSF had positive earnings in the past year.
In the past year MSF had a positive cash flow from operations.
In the past 5 years MSF has always been profitable.
Each year in the past 5 years MSF had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MSF (16.45%) is better than 90.83% of its industry peers.
With an excellent Return On Equity value of 29.65%, MSF belongs to the best of the industry, outperforming 86.24% of the companies in the same industry.
MSF has a better Return On Invested Capital (22.08%) than 90.83% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MSF 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
MSF's Profit Margin of 36.15% is amongst the best of the industry. MSF outperforms 92.66% of its industry peers.
MSF's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 45.62%, MSF belongs to the best of the industry, outperforming 94.50% of the companies in the same industry.
In the last couple of years the Operating Margin of MSF has grown nicely.
MSF has a Gross Margin (68.82%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of MSF has remained more or less at the same level.
| 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 MSF is creating value.
Compared to 1 year ago, MSF has about the same amount of shares outstanding.
Compared to 5 years ago, MSF has less shares outstanding
The debt/assets ratio for MSF has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 10.09 indicates that MSF is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 10.09, MSF belongs to the top of the industry, outperforming 88.99% of the companies in the same industry.
MSF has a debt to FCF ratio of 1.25. This is a very positive value and a sign of high solvency as it would only need 1.25 years to pay back of all of its debts.
MSF's Debt to FCF ratio of 1.25 is fine compared to the rest of the industry. MSF outperforms 75.23% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that MSF is not too dependend on debt financing.
The Debt to Equity ratio of MSF (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 10.09 |
ROIC/WACC1.99
WACC11.09%
2.3 Liquidity
MSF has a Current Ratio of 1.35. This is a normal value and indicates that MSF is financially healthy and should not expect problems in meeting its short term obligations.
MSF has a Current ratio (1.35) which is comparable to the rest of the industry.
A Quick Ratio of 1.35 indicates that MSF should not have too much problems paying its short term obligations.
The Quick ratio of MSF (1.35) is comparable to the rest of the industry.
MSF 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
MSF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.50%, which is quite good.
MSF shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.86% yearly.
Looking at the last year, MSF shows a quite strong growth in Revenue. The Revenue has grown by 14.93% in the last year.
Measured over the past years, MSF shows a quite strong growth in Revenue. The Revenue has been growing by 14.52% on average per year.
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, MSF will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.23% on average per year.
The Revenue is expected to grow by 12.67% on average over the next years. This is quite good.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 37.65, MSF can be considered very expensive at the moment.
Based on the Price/Earnings ratio, MSF is valued a bit cheaper than 64.22% of the companies in the same industry.
MSF's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.02.
The Price/Forward Earnings ratio is 32.48, which means the current valuation is very expensive for MSF.
The rest of the industry has a similar Price/Forward Earnings ratio as MSF.
The average S&P500 Price/Forward Earnings ratio is at 22.57. MSF is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.65 | ||
| Fwd PE | 32.48 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSF.
The rest of the industry has a similar Price/Free Cash Flow ratio as MSF.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.3 | ||
| EV/EBITDA | 23.03 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MSF does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of MSF may justify a higher PE ratio.
A more expensive valuation may be justified as MSF's earnings are expected to grow with 17.55% in the coming years.
PEG (NY)2.37
PEG (5Y)2
EPS Next 2Y16.5%
EPS Next 3Y17.55%
5. Dividend
5.1 Amount
With a yearly dividend of 0.70%, MSF is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.10, MSF pays a better dividend. On top of this MSF pays more dividend than 81.65% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, MSF's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
On average, the dividend of MSF grows each year by 10.24%, which is quite nice.
Dividend Growth(5Y)10.24%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
MSF pays out 23.65% of its income as dividend. This is a sustainable payout ratio.
MSF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.65%
EPS Next 2Y16.5%
EPS Next 3Y17.55%
FRA:MSF (10/10/2025, 7:00:00 PM)
443.85
-4.95 (-1.1%)
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 Cap3299.21B
Analysts85.71
Price Target524.87 (18.25%)
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 Years6
Div Non Decr Years6
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)-0.87%
PT rev (3m)15.8%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.89%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)2.7%
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 | 37.65 | ||
| Fwd PE | 32.48 | ||
| P/S | 13.55 | ||
| P/FCF | 53.3 | ||
| P/OCF | 28.03 | ||
| P/B | 11.11 | ||
| P/tB | 18.95 | ||
| EV/EBITDA | 23.03 |
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 | 10.09 |
F-Score5
WACC11.09%
ROIC/WACC1.99
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%