MICROSOFT CORP-CDR (MSFT.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MSFT - CA59516M1041
34.14 CAD
+3.84 (+12.67%)
MSFT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 64 industry peers in the Software industry. MSFT scores excellent on profitability, but there are some minor concerns on its financial health. MSFT scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings could make MSFT a good candidate for value investing.
1. Profitability
1.1 Basic Checks
In the past year MSFT was profitable.
In the past year MSFT had a positive cash flow from operations.
Each year in the past 5 years MSFT has been profitable.
In the past 5 years MSFT always reported a positive cash flow from operatings.
1.2 Ratios
MSFT's Return On Assets of 17.37% is amongst the best of the industry. MSFT outperforms 93.94% of its industry peers.
Looking at the Return On Equity, with a value of 30.64%, MSFT belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
MSFT has a better Return On Invested Capital (22.54%) than 92.42% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MSFT is significantly above the industry average of 11.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.37% | ||
| ROE | 30.64% | ||
| ROIC | 22.54% |
ROA(3y)18.24%
ROA(5y)17.55%
ROE(3y)37.2%
ROE(5y)38.43%
ROIC(3y)23.84%
ROIC(5y)22.71%
1.3 Margins
The Profit Margin of MSFT (35.43%) is better than 95.45% of its industry peers.
MSFT's Profit Margin has improved in the last couple of years.
MSFT's Operating Margin of 44.96% is amongst the best of the industry. MSFT outperforms 98.48% of its industry peers.
MSFT's Operating Margin has improved in the last couple of years.
MSFT's Gross Margin of 69.41% is fine compared to the rest of the industry. MSFT outperforms 69.70% of its industry peers.
In the last couple of years the Gross Margin of MSFT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.96% | ||
| PM (TTM) | 35.43% | ||
| GM | 69.41% |
OM growth 3Y2.39%
OM growth 5Y5.51%
PM growth 3Y-0.46%
PM growth 5Y2.89%
GM growth 3Y0.4%
GM growth 5Y1.15%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSFT is creating value.
The number of shares outstanding for MSFT remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MSFT has less shares outstanding
The debt/assets ratio for MSFT has been reduced compared to a year ago.
2.2 Solvency
MSFT has an Altman-Z score of 2.24. This is not the best score and indicates that MSFT is in the grey zone with still only limited risk for bankruptcy at the moment.
MSFT has a Altman-Z score of 2.24. This is in the better half of the industry: MSFT outperforms 63.64% of its industry peers.
The Debt to FCF ratio of MSFT is 1.16, which is an excellent value as it means it would take MSFT, only 1.16 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.16, MSFT is in the better half of the industry, outperforming 78.79% of the companies in the same industry.
MSFT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of MSFT (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Altman-Z | 2.24 |
ROIC/WACC1.95
WACC11.59%
2.3 Liquidity
MSFT has a Current Ratio of 1.35. This is a normal value and indicates that MSFT is financially healthy and should not expect problems in meeting its short term obligations.
MSFT has a Current ratio (1.35) which is comparable to the rest of the industry.
MSFT has a Quick Ratio of 1.34. This is a normal value and indicates that MSFT is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.34, MSFT perfoms like the industry average, outperforming 57.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.30%, which is quite good.
MSFT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.98% yearly.
MSFT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.04%.
Measured over the past years, MSFT shows a quite strong growth in Revenue. The Revenue has been growing by 14.26% on average per year.
EPS 1Y (TTM)12.3%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%10.24%
Revenue 1Y (TTM)15.04%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%12.27%
3.2 Future
Based on estimates for the next years, MSFT will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.82% on average per year.
The Revenue is expected to grow by 13.95% on average over the next years. This is quite good.
EPS Next Y13.17%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
EPS Next 5Y14.82%
Revenue Next Year13.05%
Revenue Next 2Y13.39%
Revenue Next 3Y13.84%
Revenue Next 5Y13.95%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
MSFT is valuated cheaply with a Price/Earnings ratio of 1.94.
MSFT's Price/Earnings ratio is rather cheap when compared to the industry. MSFT is cheaper than 98.48% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.54. MSFT is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 1.58 indicates a rather cheap valuation of MSFT.
MSFT's Price/Forward Earnings ratio is rather cheap when compared to the industry. MSFT is cheaper than 96.97% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.78, MSFT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.94 | ||
| Fwd PE | 1.58 |
4.2 Price Multiples
MSFT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. MSFT is cheaper than 98.48% of the companies in the same industry.
MSFT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MSFT is cheaper than 96.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.55 | ||
| EV/EBITDA | 0.77 |
4.3 Compensation for Growth
MSFT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of MSFT may justify a higher PE ratio.
A more expensive valuation may be justified as MSFT's earnings are expected to grow with 14.77% in the coming years.
PEG (NY)0.15
PEG (5Y)0.1
EPS Next 2Y13.6%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
MSFT has a yearly dividend return of 0.80%, which is pretty low.
Compared to an average industry Dividend Yield of 1.73, MSFT pays a better dividend. On top of this MSFT pays more dividend than 92.42% of the companies listed in the same industry.
With a Dividend Yield of 0.80, MSFT pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
On average, the dividend of MSFT grows each year by 10.19%, which is quite nice.
MSFT has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)10.19%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
24.68% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
The dividend of MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.68%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
TSX:MSFT (12/12/2025, 7:00:00 PM)
34.14
+3.84 (+12.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.18%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap253.80B
Revenue(TTM)261.80B
Net Income(TTM)92.75B
Analysts84.92
Price TargetN/A
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
Yearly Dividend2.93
Dividend Growth(5Y)10.19%
DP24.68%
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.11%
Min EPS beat(2)1.79%
Max EPS beat(2)4.43%
EPS beat(4)3
Avg EPS beat(4)1.76%
Min EPS beat(4)-1.43%
Max EPS beat(4)4.43%
EPS beat(8)7
Avg EPS beat(8)3.99%
EPS beat(12)8
Avg EPS beat(12)2.17%
EPS beat(16)12
Avg EPS beat(16)3.56%
Revenue beat(2)0
Avg Revenue beat(2)-0.54%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.32%
Revenue beat(4)0
Avg Revenue beat(4)-0.7%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)-0.26%
Revenue beat(8)2
Avg Revenue beat(8)-0.1%
Revenue beat(12)2
Avg Revenue beat(12)-0.7%
Revenue beat(16)4
Avg Revenue beat(16)-0.36%
PT rev (1m)N/A
PT rev (3m)N/A
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)N/A
EPS NY rev (3m)N/A
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)N/A
Revenue NY rev (3m)N/A
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.94 | ||
| Fwd PE | 1.58 | ||
| P/S | 0.68 | ||
| P/FCF | 2.55 | ||
| P/OCF | 1.42 | ||
| P/B | 0.59 | ||
| P/tB | 1.13 | ||
| EV/EBITDA | 0.77 |
EPS(TTM)17.63
EY51.64%
EPS(NY)21.64
Fwd EY63.38%
FCF(TTM)13.37
FCFY39.17%
OCF(TTM)23.98
OCFY70.24%
SpS49.99
BVpS57.8
TBVpS30.19
PEG (NY)0.15
PEG (5Y)0.1
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.37% | ||
| ROE | 30.64% | ||
| ROCE | 27.7% | ||
| ROIC | 22.54% | ||
| ROICexc | 27.11% | ||
| ROICexgc | 45.87% | ||
| OM | 44.96% | ||
| PM (TTM) | 35.43% | ||
| GM | 69.41% | ||
| FCFM | 26.75% |
ROA(3y)18.24%
ROA(5y)17.55%
ROE(3y)37.2%
ROE(5y)38.43%
ROIC(3y)23.84%
ROIC(5y)22.71%
ROICexc(3y)35.43%
ROICexc(5y)40.49%
ROICexgc(3y)63.99%
ROICexgc(5y)78.75%
ROCE(3y)29.44%
ROCE(5y)28%
ROICexgc growth 3Y-19.4%
ROICexgc growth 5Y-12.98%
ROICexc growth 3Y-17.33%
ROICexc growth 5Y-7.77%
OM growth 3Y2.39%
OM growth 5Y5.51%
PM growth 3Y-0.46%
PM growth 5Y2.89%
GM growth 3Y0.4%
GM growth 5Y1.15%
F-Score6
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 208.71% | ||
| Cap/Sales | 21.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.01% | ||
| Profit Quality | 75.51% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 2.24 |
F-Score6
WACC11.59%
ROIC/WACC1.95
Cap/Depr(3y)189.18%
Cap/Depr(5y)172.93%
Cap/Sales(3y)14.49%
Cap/Sales(5y)13.3%
Profit Quality(3y)85.27%
Profit Quality(5y)89.91%
High Growth Momentum
Growth
EPS 1Y (TTM)12.3%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%10.24%
EPS Next Y13.17%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
EPS Next 5Y14.82%
Revenue 1Y (TTM)15.04%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%12.27%
Revenue Next Year13.05%
Revenue Next 2Y13.39%
Revenue Next 3Y13.84%
Revenue Next 5Y13.95%
EBIT growth 1Y17.09%
EBIT growth 3Y16.11%
EBIT growth 5Y20.56%
EBIT Next Year40.23%
EBIT Next 3Y23.1%
EBIT Next 5Y19.13%
FCF growth 1Y17.47%
FCF growth 3Y9.69%
FCF growth 5Y14.13%
OCF growth 1Y48.82%
OCF growth 3Y15.6%
OCF growth 5Y17.83%
MICROSOFT CORP-CDR / MSFT.CA FAQ
Can you provide the ChartMill fundamental rating for MICROSOFT CORP-CDR?
ChartMill assigns a fundamental rating of 7 / 10 to MSFT.CA.
What is the valuation status for MSFT stock?
ChartMill assigns a valuation rating of 9 / 10 to MICROSOFT CORP-CDR (MSFT.CA). This can be considered as Undervalued.
Can you provide the profitability details for MICROSOFT CORP-CDR?
MICROSOFT CORP-CDR (MSFT.CA) has a profitability rating of 9 / 10.
What are the PE and PB ratios of MICROSOFT CORP-CDR (MSFT.CA) stock?
The Price/Earnings (PE) ratio for MICROSOFT CORP-CDR (MSFT.CA) is 1.94 and the Price/Book (PB) ratio is 0.59.
What is the earnings growth outlook for MICROSOFT CORP-CDR?
The Earnings per Share (EPS) of MICROSOFT CORP-CDR (MSFT.CA) is expected to grow by 13.17% in the next year.