485.5 USD
+8.51 (+1.78%)
486.738 USD
+1.24 (+0.25%)
Taking everything into account, MSFT scores 7 out of 10 in our fundamental rating. MSFT was compared to 280 industry peers in the Software industry. MSFT has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. MSFT is not valued too expensively and it also shows a decent growth rate. MSFT also has an excellent dividend rating. These ratings could make MSFT a good candidate for dividend and quality 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.
In the past 5 years MSFT has always been profitable.
In the past 5 years MSFT always reported a positive cash flow from operatings.
1.2 Ratios
MSFT has a better Return On Assets (16.49%) than 91.79% of its industry peers.
MSFT has a better Return On Equity (28.90%) than 91.79% of its industry peers.
MSFT's Return On Invested Capital of 22.25% is amongst the best of the industry. MSFT outperforms 94.64% 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 11.98%.
| 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
MSFT has a Profit Margin of 35.71%. This is amongst the best in the industry. MSFT outperforms 92.50% of its industry peers.
MSFT's Profit Margin has improved in the last couple of years.
The Operating Margin of MSFT (46.27%) is better than 96.79% of its industry peers.
In the last couple of years the Operating Margin of MSFT has grown nicely.
With a Gross Margin value of 68.76%, MSFT perfoms like the industry average, outperforming 49.64% of the companies in the same industry.
MSFT's Gross Margin has been stable in the last couple of years.
| 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
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.
MSFT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MSFT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 9.75 indicates that MSFT is not in any danger for bankruptcy at the moment.
MSFT has a better Altman-Z score (9.75) than 87.14% of its industry peers.
MSFT 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.
The Debt to FCF ratio of MSFT (1.25) is better than 73.57% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that MSFT is not too dependend on debt financing.
MSFT has a Debt to Equity ratio (0.24) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.75 |
ROIC/WACC2.04
WACC10.89%
2.3 Liquidity
MSFT has a Current Ratio of 1.40. 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 (1.40) which is in line with its industry peers.
MSFT has a Quick 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.
MSFT's Quick ratio of 1.39 is in line compared to the rest of the industry. MSFT outperforms 44.29% of its industry peers.
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 Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.39%, which is quite good.
The Earnings Per Share has been growing by 18.86% on average over the past years. This is quite good.
MSFT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.59%.
The Revenue has been growing by 14.52% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 18.83% on average over the next years. This is quite good.
The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
EPS Next Y16.96%
EPS Next 2Y17.68%
EPS Next 3Y18.52%
EPS Next 5Y18.83%
Revenue Next Year16.4%
Revenue Next 2Y15.53%
Revenue Next 3Y15.94%
Revenue Next 5Y15.04%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 33.55, the valuation of MSFT can be described as expensive.
MSFT's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.15. MSFT is valued slightly more expensive when compared to this.
MSFT is valuated quite expensively with a Price/Forward Earnings ratio of 25.70.
MSFT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MSFT is cheaper than 63.57% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MSFT to the average of the S&P500 Index (36.12), we can say MSFT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.55 | ||
| Fwd PE | 25.7 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MSFT indicates a somewhat cheap valuation: MSFT is cheaper than 77.50% of the companies listed in the same industry.
MSFT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MSFT is cheaper than 61.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.25 | ||
| EV/EBITDA | 20.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MSFT has an outstanding profitability rating, which may justify a higher PE ratio.
MSFT's earnings are expected to grow with 18.52% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.98
PEG (5Y)1.78
EPS Next 2Y17.68%
EPS Next 3Y18.52%
5. Dividend
5.1 Amount
With a yearly dividend of 0.76%, MSFT is not a good candidate for dividend investing.
MSFT's Dividend Yield is rather good when compared to the industry average which is at 51.64. MSFT pays more dividend than 90.36% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, MSFT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
5.2 History
The dividend of MSFT is nicely growing with an annual growth rate of 10.24%!
MSFT has been paying a dividend for at least 10 years, so it has 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 Years20
Div Non Decr Years20
5.3 Sustainability
23.52% 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.
DP23.52%
EPS Next 2Y17.68%
EPS Next 3Y18.52%
485.5
+8.51 (+1.78%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.31%
Inst Owner Change1.52%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap3.61T
Revenue(TTM)293.81B
Net Income(TTM)104.91B
Analysts86.29
Price Target634.71 (30.73%)
Short Float %0.71%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP23.52%
Div Incr Years20
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.33%
Min EPS beat(2)6.2%
Max EPS beat(2)10.46%
EPS beat(4)4
Avg EPS beat(4)5.95%
Min EPS beat(4)1.79%
Max EPS beat(4)10.46%
EPS beat(8)7
Avg EPS beat(8)4.04%
EPS beat(12)10
Avg EPS beat(12)4.42%
EPS beat(16)12
Avg EPS beat(16)3.32%
Revenue beat(2)2
Avg Revenue beat(2)1.31%
Min Revenue beat(2)1.09%
Max Revenue beat(2)1.54%
Revenue beat(4)3
Avg Revenue beat(4)0.57%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)1.54%
Revenue beat(8)3
Avg Revenue beat(8)-0.03%
Revenue beat(12)5
Avg Revenue beat(12)-0.01%
Revenue beat(16)5
Avg Revenue beat(16)-0.36%
PT rev (1m)2.68%
PT rev (3m)4.96%
EPS NQ rev (1m)4.33%
EPS NQ rev (3m)4.44%
EPS NY rev (1m)0.96%
EPS NY rev (3m)3.64%
Revenue NQ rev (1m)0.37%
Revenue NQ rev (3m)0.39%
Revenue NY rev (1m)0.81%
Revenue NY rev (3m)2.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.55 | ||
| Fwd PE | 25.7 | ||
| P/S | 12.28 | ||
| P/FCF | 46.25 | ||
| P/OCF | 24.54 | ||
| P/B | 9.94 | ||
| P/tB | 16.23 | ||
| EV/EBITDA | 20.09 |
EPS(TTM)14.47
EY2.98%
EPS(NY)18.89
Fwd EY3.89%
FCF(TTM)10.5
FCFY2.16%
OCF(TTM)19.78
OCFY4.07%
SpS39.53
BVpS48.85
TBVpS29.92
PEG (NY)1.98
PEG (5Y)1.78
Graham Number126.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.49% | ||
| ROE | 28.9% | ||
| ROCE | 27.11% | ||
| ROIC | 22.25% | ||
| ROICexc | 27.94% | ||
| ROICexgc | 43.14% | ||
| OM | 46.27% | ||
| PM (TTM) | 35.71% | ||
| GM | 68.76% | ||
| FCFM | 26.55% |
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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Debt/EBITDA | 0.49 | ||
| Cap/Depr | 173.29% | ||
| Cap/Sales | 23.49% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 83.66% | ||
| Profit Quality | 74.36% | ||
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 9.75 |
F-Score6
WACC10.89%
ROIC/WACC2.04
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)19.39%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%25.15%
EPS Next Y16.96%
EPS Next 2Y17.68%
EPS Next 3Y18.52%
EPS Next 5Y18.83%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.43%
Revenue Next Year16.4%
Revenue Next 2Y15.53%
Revenue Next 3Y15.94%
Revenue Next 5Y15.04%
EBIT growth 1Y20.2%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year51.87%
EBIT Next 3Y30.06%
EBIT Next 5Y23.22%
FCF growth 1Y23.39%
FCF growth 3Y3.2%
FCF growth 5Y9.62%
OCF growth 1Y54.83%
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.
What is the valuation status for MSFT stock?
ChartMill assigns a valuation rating of 4 / 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 are the PE and PB ratios of MICROSOFT CORP (MSFT) stock?
The Price/Earnings (PE) ratio for MICROSOFT CORP (MSFT) is 33.55 and the Price/Book (PB) ratio is 9.94.
What is the earnings growth outlook for MICROSOFT CORP?
The Earnings per Share (EPS) of MICROSOFT CORP (MSFT) is expected to grow by 16.96% in the next year.