MICROSOFT CORP (MSFT) Stock Fundamental Analysis

NASDAQ:MSFT • US5949181045

401.56 USD
+0.96 (+0.24%)
Last: Feb 26, 2026, 02:43 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

7

Overall MSFT gets a fundamental rating of 7 out of 10. We evaluated MSFT against 274 industry peers in the Software industry. MSFT gets an excellent profitability rating and is at the same time showing great financial health properties. MSFT is not priced too expensively while it is growing strongly. Keep and eye on this one! MSFT also has an excellent dividend rating. With these ratings, MSFT could be worth investigating further for dividend and growth and quality investing!.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

  • In the past year MSFT was profitable.
  • MSFT had a positive operating cash flow in the past year.
  • 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.
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 has a better Return On Assets (17.93%) than 94.53% of its industry peers.
  • MSFT has a better Return On Equity (30.51%) than 91.97% of its industry peers.
  • MSFT has a better Return On Invested Capital (21.86%) than 94.53% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 10.77%.
Industry RankSector Rank
ROA 17.93%
ROE 30.51%
ROIC 21.86%
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 (39.04%) than 93.07% of its industry peers.
  • MSFT's Profit Margin has improved in the last couple of years.
  • MSFT has a better Operating Margin (46.67%) than 96.72% of its industry peers.
  • MSFT's Operating Margin has improved in the last couple of years.
  • With a Gross Margin value of 68.59%, MSFT perfoms like the industry average, outperforming 49.27% of the companies in the same industry.
  • In the last couple of years the Gross Margin of MSFT has remained more or less at the same level.
Industry RankSector Rank
OM 46.67%
PM (TTM) 39.04%
GM 68.59%
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

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ROAROEROICOperating and Profit MarginShow most profitable peers

8

2. Health

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.
  • Compared to 1 year ago, MSFT has about the same amount of shares outstanding.
  • 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

  • An Altman-Z score of 8.35 indicates that MSFT is not in any danger for bankruptcy at the moment.
  • With an excellent Altman-Z score value of 8.35, MSFT belongs to the best of the industry, outperforming 89.42% of the companies in the same industry.
  • The Debt to FCF ratio of MSFT is 1.30, which is an excellent value as it means it would take MSFT, only 1.30 years of fcf income to pay off all of its debts.
  • MSFT has a better Debt to FCF ratio (1.30) than 72.26% of its industry peers.
  • A Debt/Equity ratio of 0.23 indicates that MSFT is not too dependend on debt financing.
  • The Debt to Equity ratio of MSFT (0.23) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.23
Debt/FCF 1.3
Altman-Z 8.35
ROIC/WACC2.01
WACC10.86%
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 1.39. 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 Current ratio value of 1.39, MSFT perfoms like the industry average, outperforming 42.70% of the companies in the same industry.
  • MSFT has a Quick Ratio of 1.38. 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 1.38, MSFT perfoms like the industry average, outperforming 42.70% of the companies in the same industry.
  • MSFT 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 RankSector Rank
Current Ratio 1.39
Quick Ratio 1.38
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

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

7

3. Growth

3.1 Past

  • MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.83%, which is quite impressive.
  • MSFT 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, MSFT shows a quite strong growth in Revenue. The Revenue has grown by 16.67% in the last year.
  • The Revenue has been growing by 14.52% on average over the past years. This is quite good.
EPS 1Y (TTM)23.83%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%28.17%
Revenue 1Y (TTM)16.67%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%16.72%

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.
  • Based on estimates for the next years, MSFT will show a quite strong growth in Revenue. The Revenue will grow by 16.18% on average per year.
EPS Next Y24.51%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
EPS Next 5Y18.94%
Revenue Next Year17.53%
Revenue Next 2Y16.55%
Revenue Next 3Y16.52%
Revenue Next 5Y16.18%

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.
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

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Find the best growth stocksShow best growing peers

5

4. Valuation

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 26.11, which means the current valuation is very expensive for MSFT.
  • Based on the Price/Earnings ratio, MSFT is valued a bit cheaper than 61.31% of the companies in the same industry.
  • MSFT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.05, which is the current average of the S&P500 Index.
  • The Price/Forward Earnings ratio is 20.66, which indicates a rather expensive current valuation of MSFT.
  • Based on the Price/Forward Earnings ratio, MSFT is valued a bit cheaper than the industry average as 62.77% of the companies are valued more expensively.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 28.03, MSFT is valued a bit cheaper.
Industry RankSector Rank
PE 26.11
Fwd PE 20.66
MSFT Price Earnings VS Forward Price EarningsMSFT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • 76.28% of the companies in the same industry are more expensive than MSFT, based on the Enterprise Value to EBITDA ratio.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of MSFT is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 38.52
EV/EBITDA 16.24
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.
  • The excellent profitability rating of MSFT may justify a higher PE ratio.
  • MSFT's earnings are expected to grow with 18.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.07
PEG (5Y)1.38
EPS Next 2Y19.37%
EPS Next 3Y18.79%

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

7

5. Dividend

5.1 Amount

  • With a yearly dividend of 0.91%, MSFT is not a good candidate for dividend investing.
  • Compared to an average industry Dividend Yield of 0.60, MSFT pays a better dividend. On top of this MSFT pays more dividend than 90.51% of the companies listed in the same industry.
  • With a Dividend Yield of 0.91, MSFT pays less dividend than the S&P500 average, which is at 1.80.
Industry RankSector Rank
Dividend Yield 0.91%

5.2 History

  • The dividend of MSFT is nicely growing with an annual growth rate of 10.24%!
  • MSFT has paid a dividend for at least 10 years, which is a reliable track record.
  • MSFT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.24%
Div Incr Years20
Div Non Decr Years20
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

  • 21.19% 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.
DP21.19%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
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

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Find the best dividend stocksShow peers with best dividend

MICROSOFT CORP

NASDAQ:MSFT (2/26/2026, 2:43:06 PM)

401.56

+0.96 (+0.24%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)01-28
Earnings (Next)04-28
Inst Owners75.56%
Inst Owner Change0.21%
Ins Owners0.03%
Ins Owner Change0.04%
Market Cap2.98T
Revenue(TTM)305.45B
Net Income(TTM)119.26B
Analysts86.36
Price Target612.29 (52.48%)
Short Float %0.79%
Short Ratio1.81
Dividend
Industry RankSector Rank
Dividend Yield 0.91%
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP21.19%
Div Incr Years20
Div Non Decr Years20
Ex-Date02-19
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.54%
Min EPS beat(2)2.62%
Max EPS beat(2)10.46%
EPS beat(4)4
Avg EPS beat(4)6.15%
Min EPS beat(4)2.62%
Max EPS beat(4)10.46%
EPS beat(8)7
Avg EPS beat(8)3.96%
EPS beat(12)11
Avg EPS beat(12)4.71%
EPS beat(16)12
Avg EPS beat(16)3.16%
Revenue beat(2)1
Avg Revenue beat(2)0.18%
Min Revenue beat(2)-0.73%
Max Revenue beat(2)1.09%
Revenue beat(4)3
Avg Revenue beat(4)0.57%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)1.54%
Revenue beat(8)3
Avg Revenue beat(8)-0.06%
Revenue beat(12)5
Avg Revenue beat(12)0.13%
Revenue beat(16)5
Avg Revenue beat(16)-0.38%
PT rev (1m)-3.23%
PT rev (3m)-1.96%
EPS NQ rev (1m)1.36%
EPS NQ rev (3m)1.35%
EPS NY rev (1m)1.4%
EPS NY rev (3m)6.45%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)0.21%
Revenue NY rev (1m)0.4%
Revenue NY rev (3m)0.97%
Valuation
Industry RankSector Rank
PE 26.11
Fwd PE 20.66
P/S 9.76
P/FCF 38.52
P/OCF 18.58
P/B 7.63
P/tB 11.88
EV/EBITDA 16.24
EPS(TTM)15.38
EY3.83%
EPS(NY)19.44
Fwd EY4.84%
FCF(TTM)10.43
FCFY2.6%
OCF(TTM)21.62
OCFY5.38%
SpS41.13
BVpS52.64
TBVpS33.8
PEG (NY)1.07
PEG (5Y)1.38
Graham Number134.97
Profitability
Industry RankSector Rank
ROA 17.93%
ROE 30.51%
ROCE 26.63%
ROIC 21.86%
ROICexc 26.24%
ROICexgc 38.24%
OM 46.67%
PM (TTM) 39.04%
GM 68.59%
FCFM 25.34%
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 0.23
Debt/FCF 1.3
Debt/EBITDA 0.51
Cap/Depr 222.84%
Cap/Sales 27.2%
Interest Coverage 250
Cash Conversion 89.25%
Profit Quality 64.91%
Current Ratio 1.39
Quick Ratio 1.38
Altman-Z 8.35
F-Score6
WACC10.86%
ROIC/WACC2.01
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)23.83%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%28.17%
EPS Next Y24.51%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
EPS Next 5Y18.94%
Revenue 1Y (TTM)16.67%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%16.72%
Revenue Next Year17.53%
Revenue Next 2Y16.55%
Revenue Next 3Y16.52%
Revenue Next 5Y16.18%
EBIT growth 1Y21.11%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year57.72%
EBIT Next 3Y28.9%
EBIT Next 5Y23.22%
FCF growth 1Y14.78%
FCF growth 3Y3.2%
FCF growth 5Y9.62%
OCF growth 1Y56.37%
OCF growth 3Y15.21%
OCF growth 5Y17.55%

MICROSOFT CORP / MSFT FAQ

Can you provide the ChartMill fundamental rating for MICROSOFT CORP?

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


Can you provide the valuation status for MICROSOFT CORP?

ChartMill assigns a valuation rating of 5 / 10 to MICROSOFT CORP (MSFT). This can be considered as Fairly Valued.


Can you provide the profitability details for MICROSOFT CORP?

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


What is the financial health of MICROSOFT CORP (MSFT) stock?

The financial health rating of MICROSOFT CORP (MSFT) is 8 / 10.


What is the expected EPS growth for MICROSOFT CORP (MSFT) stock?

The Earnings per Share (EPS) of MICROSOFT CORP (MSFT) is expected to grow by 24.51% in the next year.