MICROSOFT CORP (MSFT) Fundamental Analysis & Valuation

NASDAQ:MSFT • US5949181045

Current stock price

414.44 USD
+6.66 (+1.63%)
At close:
413.242 USD
-1.2 (-0.29%)
After Hours:

This MSFT fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. MSFT Profitability Analysis

1.1 Basic Checks

  • MSFT had positive earnings in the past year.
  • MSFT had a positive operating cash flow in the past year.
  • Each year in the past 5 years MSFT has been profitable.
  • MSFT had a positive operating cash flow in each of the past 5 years.
MSFT Yearly Net Income VS EBIT VS OCF VS FCFMSFT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B 100B

1.2 Ratios

  • MSFT's Return On Assets of 18.04% is amongst the best of the industry. MSFT outperforms 93.38% of its industry peers.
  • With an excellent Return On Equity value of 30.22%, MSFT belongs to the best of the industry, outperforming 90.81% of the companies in the same industry.
  • The Return On Invested Capital of MSFT (21.93%) is better than 94.49% 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 11.04%.
Industry RankSector Rank
ROA 18.04%
ROE 30.22%
ROIC 21.93%
ROA(3y)17.07%
ROA(5y)17.9%
ROE(3y)32.52%
ROE(5y)36.88%
ROIC(3y)22.94%
ROIC(5y)23.52%
MSFT Yearly ROA, ROE, ROICMSFT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

1.3 Margins

  • MSFT has a better Profit Margin (39.34%) than 95.96% of its industry peers.
  • MSFT's Profit Margin has improved in the last couple of years.
  • MSFT has a better Operating Margin (46.80%) than 98.53% of its industry peers.
  • MSFT's Operating Margin has improved in the last couple of years.
  • MSFT has a Gross Margin (68.31%) which is in line with its industry peers.
  • MSFT's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 46.8%
PM (TTM) 39.34%
GM 68.31%
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%
MSFT Yearly Profit, Operating, Gross MarginsMSFT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60

More info and screens

ROAROEROICOperating and Profit MarginShow most profitable peers

7

2. MSFT Health Analysis

2.1 Basic Checks

  • MSFT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
  • The number of shares outstanding for MSFT remains at a similar level compared to 1 year ago.
  • MSFT has less shares outstanding than it did 5 years ago.
  • MSFT has a better debt/assets ratio than last year.
MSFT Yearly Shares OutstandingMSFT Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B
MSFT Yearly Total Debt VS Total AssetsMSFT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200B 400B 600B

2.2 Solvency

  • MSFT has an Altman-Z score of 8.44. This indicates that MSFT is financially healthy and has little risk of bankruptcy at the moment.
  • MSFT's Altman-Z score of 8.44 is amongst the best of the industry. MSFT outperforms 85.29% of its industry peers.
  • MSFT has a debt to FCF ratio of 1.42. This is a very positive value and a sign of high solvency as it would only need 1.42 years to pay back of all of its debts.
  • MSFT has a Debt to FCF ratio of 1.42. This is in the better half of the industry: MSFT outperforms 69.85% of its industry peers.
  • MSFT has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
  • MSFT has a Debt to Equity ratio (0.22) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.22
Debt/FCF 1.42
Altman-Z 8.44
ROIC/WACC2.03
WACC10.81%
MSFT Yearly LT Debt VS Equity VS FCFMSFT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100B 200B 300B

2.3 Liquidity

  • MSFT has a Current Ratio of 1.28. This is a normal value and indicates that MSFT is financially healthy and should not expect problems in meeting its short term obligations.
  • MSFT's Current ratio of 1.28 is on the low side compared to the rest of the industry. MSFT is outperformed by 62.13% of its industry peers.
  • A Quick Ratio of 1.27 indicates that MSFT should not have too much problems paying its short term obligations.
  • Looking at the Quick ratio, with a value of 1.27, MSFT is doing worse than 61.40% of the companies in the same industry.
  • The current and quick ratio evaluation for MSFT 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 RankSector Rank
Current Ratio 1.28
Quick Ratio 1.27
MSFT Yearly Current Assets VS Current LiabilitesMSFT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50B 100B 150B

More info and screens

WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

7

3. MSFT Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 25.12% over the past year.
  • Measured over the past years, MSFT 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 17.87% 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 14.52% yearly.
EPS 1Y (TTM)25.12%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%23.41%
Revenue 1Y (TTM)17.87%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.3%

3.2 Future

  • MSFT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.94% yearly.
  • MSFT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.74% yearly.
EPS Next Y24.06%
EPS Next 2Y19.21%
EPS Next 3Y18.63%
EPS Next 5Y18.94%
Revenue Next Year17.49%
Revenue Next 2Y16.61%
Revenue Next 3Y16.48%
Revenue Next 5Y15.74%

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.
MSFT Yearly Revenue VS EstimatesMSFT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 200B 400B 600B
MSFT Yearly EPS VS EstimatesMSFT Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 10 20 30 40

More info and screens

Find the best growth stocksShow best growing peers

4

4. MSFT Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 25.60, which means the current valuation is very expensive for MSFT.
  • Based on the Price/Earnings ratio, MSFT is valued a bit cheaper than the industry average as 61.40% of the companies are valued more expensively.
  • MSFT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.64, which is the current average of the S&P500 Index.
  • With a Price/Forward Earnings ratio of 21.38, MSFT is valued on the expensive side.
  • 62.50% of the companies in the same industry are more expensive than MSFT, based on the Price/Forward Earnings ratio.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 21.36, MSFT is valued at the same level.
Industry RankSector Rank
PE 25.6
Fwd PE 21.38
MSFT Price Earnings VS Forward Price EarningsMSFT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • MSFT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MSFT is cheaper than 77.57% of the companies in the same industry.
  • MSFT's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 42.21
EV/EBITDA 16.28
MSFT Per share dataMSFT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

4.3 Compensation for Growth

  • The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • MSFT has an outstanding profitability rating, which may justify a higher PE ratio.
  • A more expensive valuation may be justified as MSFT's earnings are expected to grow with 18.63% in the coming years.
PEG (NY)1.06
PEG (5Y)1.36
EPS Next 2Y19.21%
EPS Next 3Y18.63%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. MSFT Dividend Analysis

5.1 Amount

  • MSFT has a yearly dividend return of 0.89%, which is pretty low.
  • Compared to an average industry Dividend Yield of 0.68, MSFT pays a better dividend. On top of this MSFT pays more dividend than 91.18% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.80, MSFT's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.89%

5.2 History

  • On average, the dividend of MSFT grows each year by 10.24%, which is quite nice.
  • MSFT has paid a dividend for at least 10 years, which is a reliable track record.
  • MSFT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.24%
Div Incr Years21
Div Non Decr Years21
MSFT Yearly Dividends per shareMSFT Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3

5.3 Sustainability

  • 20.65% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
  • MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP20.65%
EPS Next 2Y19.21%
EPS Next 3Y18.63%
MSFT Yearly Income VS Free CF VS DividendMSFT Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B 100B
MSFT Dividend Payout.MSFT Dividend Payout, showing the Payout Ratio.MSFT Dividend Payout.PayoutRetained Earnings

More info and screens

Find the best dividend stocksShow peers with best dividend

MSFT Fundamentals: All Metrics, Ratios and Statistics

MICROSOFT CORP

NASDAQ:MSFT (5/1/2026, 8:00:01 PM)

After market: 413.242 -1.2 (-0.29%)

414.44

+6.66 (+1.63%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Industry Strength6.83
Industry Growth86.34
Earnings (Last)04-29
Earnings (Next)07-28
Inst Owners75.75%
Inst Owner Change-1.33%
Ins Owners0.03%
Ins Owner Change-0.09%
Market Cap3.08T
Revenue(TTM)318.27B
Net Income(TTM)125.22B
Analysts85.23
Price Target587.87 (41.85%)
Short Float %1.12%
Short Ratio2.48
Dividend
Industry RankSector Rank
Dividend Yield 0.89%
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP20.65%
Div Incr Years21
Div Non Decr Years21
Ex-Date05-21
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.84%
Min EPS beat(2)2.62%
Max EPS beat(2)3.06%
EPS beat(4)4
Avg EPS beat(4)5.58%
Min EPS beat(4)2.62%
Max EPS beat(4)10.46%
EPS beat(8)7
Avg EPS beat(8)4.06%
EPS beat(12)11
Avg EPS beat(12)4.33%
EPS beat(16)13
Avg EPS beat(16)3.38%
Revenue beat(2)0
Avg Revenue beat(2)-0.45%
Min Revenue beat(2)-0.73%
Max Revenue beat(2)-0.16%
Revenue beat(4)2
Avg Revenue beat(4)0.43%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)1.51%
Revenue beat(8)3
Avg Revenue beat(8)-0.05%
Revenue beat(12)4
Avg Revenue beat(12)-0.02%
Revenue beat(16)5
Avg Revenue beat(16)-0.31%
PT rev (1m)-3.09%
PT rev (3m)-7.09%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-0.95%
EPS NY rev (1m)0.01%
EPS NY rev (3m)1.04%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.38%
Valuation
Industry RankSector Rank
PE 25.6
Fwd PE 21.38
P/S 9.67
P/FCF 42.21
P/OCF 18.09
P/B 7.43
P/tB 11.18
EV/EBITDA 16.28
EPS(TTM)16.19
EY3.91%
EPS(NY)19.38
Fwd EY4.68%
FCF(TTM)9.82
FCFY2.37%
OCF(TTM)22.91
OCFY5.53%
SpS42.86
BVpS55.8
TBVpS37.09
PEG (NY)1.06
PEG (5Y)1.36
Graham Number142.574 (-65.6%)
Profitability
Industry RankSector Rank
ROA 18.04%
ROE 30.22%
ROCE 26.72%
ROIC 21.93%
ROICexc 25.51%
ROICexgc 35.92%
OM 46.8%
PM (TTM) 39.34%
GM 68.31%
FCFM 22.91%
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%
ROICexgc growth 3Y-18.02%
ROICexgc 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-Score6
Asset Turnover0.46
Health
Industry RankSector Rank
Debt/Equity 0.22
Debt/FCF 1.42
Debt/EBITDA 0.48
Cap/Depr 251.13%
Cap/Sales 30.55%
Interest Coverage 250
Cash Conversion 90.66%
Profit Quality 58.23%
Current Ratio 1.28
Quick Ratio 1.27
Altman-Z 8.44
F-Score6
WACC10.81%
ROIC/WACC2.03
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)25.12%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%23.41%
EPS Next Y24.06%
EPS Next 2Y19.21%
EPS Next 3Y18.63%
EPS Next 5Y18.94%
Revenue 1Y (TTM)17.87%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.3%
Revenue Next Year17.49%
Revenue Next 2Y16.61%
Revenue Next 3Y16.48%
Revenue Next 5Y15.74%
EBIT growth 1Y21.97%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year55.69%
EBIT Next 3Y29%
EBIT Next 5Y23.22%
FCF growth 1Y3.32%
FCF growth 3Y3.2%
FCF growth 5Y9.62%
OCF growth 1Y54.5%
OCF growth 3Y15.21%
OCF growth 5Y17.55%

MICROSOFT CORP / MSFT Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for MICROSOFT CORP?

ChartMill assigns a fundamental rating of 7 / 10 to MSFT.


What is the valuation status of MICROSOFT CORP (MSFT) stock?

ChartMill assigns a valuation rating of 4 / 10 to MICROSOFT CORP (MSFT). This can be considered as Fairly Valued.


What is the profitability of MSFT stock?

MICROSOFT CORP (MSFT) has a profitability rating of 8 / 10.


What are the PE and PB ratios of MICROSOFT CORP (MSFT) stock?

The Price/Earnings (PE) ratio for MICROSOFT CORP (MSFT) is 25.6 and the Price/Book (PB) ratio is 7.43.


How sustainable is the dividend of MICROSOFT CORP (MSFT) stock?

The dividend rating of MICROSOFT CORP (MSFT) is 7 / 10 and the dividend payout ratio is 20.65%.