MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:MSF - US5949181045 - Common Stock
396.05 EUR
+13.7 (+3.58%)
Overall MSF gets a fundamental rating of 7 out of 10. We evaluated MSF against 119 industry peers in the Software industry. MSF gets an excellent profitability rating and is at the same time showing great financial health properties. MSF has a decent growth rate and is not valued too expensively. With these ratings, MSF could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
- In the past year MSF was profitable.
- MSF had a positive operating cash flow in the past year.
- Each year in the past 5 years MSF has been profitable.
- MSF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 16.49%, MSF belongs to the best of the industry, outperforming 88.24% of the companies in the same industry.
- MSF has a Return On Equity of 28.90%. This is amongst the best in the industry. MSF outperforms 83.19% of its industry peers.
- With an excellent Return On Invested Capital value of 22.25%, MSF belongs to the best of the industry, outperforming 92.44% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for MSF is significantly above the industry average of 13.47%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.49% | ||
| ROE | 28.9% | ||
| ROIC | 22.25% |
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 35.71% is amongst the best of the industry. MSF outperforms 92.44% of its industry peers.
- In the last couple of years the Profit Margin of MSF has grown nicely.
- MSF's Operating Margin of 46.27% is amongst the best of the industry. MSF outperforms 96.64% of its industry peers.
- MSF's Operating Margin has improved in the last couple of years.
- MSF's Gross Margin of 68.76% is in line compared to the rest of the industry. MSF outperforms 42.02% of its industry peers.
- 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 | 46.27% | ||
| PM (TTM) | 35.71% | ||
| GM | 68.76% |
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.
- The number of shares outstanding for MSF has been reduced compared to 5 years ago.
- The debt/assets ratio for MSF has been reduced compared to a year ago.
2.2 Solvency
- MSF has an Altman-Z score of 9.13. This indicates that MSF is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 9.13, MSF belongs to the top of the industry, outperforming 86.55% 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.
- Looking at the Debt to FCF ratio, with a value of 1.25, MSF is in the better half of the industry, outperforming 70.59% of the companies in the same industry.
- A Debt/Equity ratio of 0.24 indicates that MSF is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.24, MSF is in line with its industry, outperforming 53.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.13 |
ROIC/WACC2.02
WACC10.99%
2.3 Liquidity
- MSF has a Current Ratio of 1.40. 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 (1.40) which is in line with its industry peers.
- A Quick Ratio of 1.39 indicates that MSF should not have too much problems paying its short term obligations.
- MSF has a Quick ratio (1.39) which is comparable to the rest of the industry.
- The current and quick ratio evaluation for MSF is rather negative, while it does have 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 | 1.4 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
- MSF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.39%, 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.
- MSF shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.59%.
- 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)19.39%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%25.15%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.43%
3.2 Future
- MSF is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.83% yearly.
- The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
EPS Next Y22.64%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
EPS Next 5Y18.83%
Revenue Next Year17.06%
Revenue Next 2Y15.95%
Revenue Next 3Y16.09%
Revenue Next 5Y15.04%
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.
- 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 32.04, which means the current valuation is very expensive for MSF.
- Based on the Price/Earnings ratio, MSF is valued a bit cheaper than the industry average as 62.18% of the companies are valued more expensively.
- MSF's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 24.25 indicates a rather expensive valuation of MSF.
- MSF's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MSF is cheaper than 64.71% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, MSF is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.04 | ||
| Fwd PE | 24.25 |
4.2 Price Multiples
- MSF's Enterprise Value to EBITDA is on the same level as the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as MSF.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.17 | ||
| EV/EBITDA | 18.48 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of MSF may justify a higher PE ratio.
- MSF's earnings are expected to grow with 18.24% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.42
PEG (5Y)1.7
EPS Next 2Y18.39%
EPS Next 3Y18.24%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.81%, MSF is not a good candidate for dividend investing.
- MSF's Dividend Yield is a higher than the industry average which is at 0.64.
- Compared to an average S&P500 Dividend Yield of 1.81, MSF's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
- The dividend of MSF is nicely growing with an annual growth rate of 10.24%!
Dividend Growth(5Y)10.24%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- 23.52% of the earnings are spent on dividend by MSF. This is a low number and sustainable payout ratio.
- The dividend of MSF is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.52%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
MICROSOFT CORP / MSF.DE FAQ
Can you provide the ChartMill fundamental rating for MICROSOFT CORP?
ChartMill assigns a fundamental rating of 7 / 10 to MSF.DE.
What is the valuation status for MSF stock?
ChartMill assigns a valuation rating of 4 / 10 to MICROSOFT CORP (MSF.DE). This can be considered as Fairly Valued.
Can you provide the profitability details for MICROSOFT CORP?
MICROSOFT CORP (MSF.DE) has a profitability rating of 8 / 10.
What is the valuation of MICROSOFT CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for MICROSOFT CORP (MSF.DE) is 32.04 and the Price/Book (PB) ratio is 9.49.
Can you provide the dividend sustainability for MSF stock?
The dividend rating of MICROSOFT CORP (MSF.DE) is 5 / 10 and the dividend payout ratio is 23.52%.