MICROSOFT CORP-CDR (MSFT.CA) Fundamental Analysis & Valuation
TSX:MSFT • CA59516M1041
28.71 CAD
-1.59 (-5.25%)
Last: Mar 4, 2026, 07:00 PM
This MSFT.CA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
Overall MSFT gets a fundamental rating of 7 out of 10. We evaluated MSFT against 70 industry peers in the Software industry. While MSFT belongs to the best of the industry regarding profitability, 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 would make MSFT suitable for value investing!
1. MSFT.CA Profitability Analysis
1.1 Basic Checks
- In the past year MSFT was profitable.
- In the past year MSFT had a positive cash flow from operations.
- MSFT had positive earnings in each of the past 5 years.
- In the past 5 years MSFT always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 17.37%, MSFT belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
- 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.
- The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 12.20%.
| 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
- MSFT has a Profit Margin of 35.43%. This is amongst the best in the industry. MSFT outperforms 95.45% of its industry peers.
- MSFT's Profit Margin has improved in the last couple of years.
- The Operating Margin of MSFT (44.96%) is better than 98.48% of its industry peers.
- In the last couple of years the Operating Margin of MSFT has grown nicely.
- MSFT has a better Gross Margin (69.41%) than 69.70% of its industry peers.
- MSFT's Gross Margin has been stable in the last couple of years.
| 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. MSFT.CA Health Analysis
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSFT is creating value.
- Compared to 1 year ago, MSFT has about the same amount of shares outstanding.
- Compared to 5 years ago, MSFT has less shares outstanding
- Compared to 1 year ago, MSFT has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.24 indicates that MSFT is not a great score, but indicates only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.24, MSFT is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
- 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.
- MSFT has a better Debt to FCF ratio (1.16) than 78.79% of its industry peers.
- MSFT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
- With a Debt to Equity ratio value of 0.24, MSFT perfoms like the industry average, outperforming 57.58% of the companies in the same 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
- A Current Ratio of 1.35 indicates that MSFT should not have too much problems paying its short term obligations.
- MSFT has a Current ratio (1.35) which is in line with its industry peers.
- A Quick Ratio of 1.34 indicates that MSFT should not have too much problems paying its short term obligations.
- The Quick ratio of MSFT (1.34) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.34 |
3. MSFT.CA Growth Analysis
3.1 Past
- The Earnings Per Share has grown by an nice 12.30% over the past year.
- MSFT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.98% yearly.
- The Revenue has grown by 15.04% in the past year. This is quite good.
- MSFT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.26% yearly.
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.
- MSFT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.95% yearly.
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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. MSFT.CA Valuation Analysis
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 1.63, which indicates a rather cheap valuation of MSFT.
- Compared to the rest of the industry, the Price/Earnings ratio of MSFT indicates a rather cheap valuation: MSFT is cheaper than 98.48% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of MSFT to the average of the S&P500 Index (27.03), we can say MSFT is valued rather cheaply.
- With a Price/Forward Earnings ratio of 1.33, the valuation of MSFT can be described as very cheap.
- Based on the Price/Forward Earnings ratio, MSFT is valued cheaply inside the industry as 96.97% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.11, MSFT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.63 | ||
| Fwd PE | 1.33 |
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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MSFT indicates a rather cheap valuation: MSFT is cheaper than 96.97% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.15 | ||
| 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)0.12
PEG (5Y)0.08
EPS Next 2Y13.6%
EPS Next 3Y14.77%
5. MSFT.CA Dividend Analysis
5.1 Amount
- MSFT has a yearly dividend return of 0.80%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.27, MSFT pays a better dividend. On top of this MSFT pays more dividend than 92.42% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, MSFT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
- The dividend of MSFT is nicely growing with an annual growth rate of 10.19%!
- 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
- MSFT pays out 24.68% of its income as dividend. This is a sustainable payout ratio.
- MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP24.68%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
MSFT.CA Fundamentals: All Metrics, Ratios and Statistics
TSX:MSFT (3/4/2026, 7:00:00 PM)
28.71
-1.59 (-5.25%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)01-29 2025-01-29/amc
Earnings (Next)04-23 2025-04-23/amc
Inst Owners74.18%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap213.43B
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-DateN/A
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 | 1.63 | ||
| Fwd PE | 1.33 | ||
| P/S | 0.57 | ||
| P/FCF | 2.15 | ||
| P/OCF | 1.2 | ||
| P/B | 0.5 | ||
| P/tB | 0.95 | ||
| EV/EBITDA | 0.77 |
EPS(TTM)17.63
EY61.41%
EPS(NY)21.64
Fwd EY75.36%
FCF(TTM)13.37
FCFY46.58%
OCF(TTM)23.98
OCFY83.53%
SpS49.99
BVpS57.8
TBVpS30.19
PEG (NY)0.12
PEG (5Y)0.08
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.
Can you provide the valuation status for MICROSOFT CORP-CDR?
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 is the financial health of MICROSOFT CORP-CDR (MSFT.CA) stock?
The financial health rating of MICROSOFT CORP-CDR (MSFT.CA) is 6 / 10.
What is the expected EPS growth for MICROSOFT CORP-CDR (MSFT.CA) stock?
The Earnings per Share (EPS) of MICROSOFT CORP-CDR (MSFT.CA) is expected to grow by 13.17% in the next year.