MICROSOFT CORP (MSFT)       248.16  +0.16 (+0.06%)

248.16  +0.16 (+0.06%)

US5949181045 - Common Stock - After market: 248.13 -0.03 (-0.01%)


Fundamental Rating

6

Overall MSFT gets a fundamental rating of 6 out of 10. We evaluated MSFT against 373 industry peers in the Software industry. While MSFT has a great profitability rating, there are some minor concerns on its financial health. While showing a medium growth rate, MSFT is valued expensive at the moment.




Profitability

Profitability Rating

8

MSFT has a Return On Assets of 19.40%. This is amongst the best returns in the industry. The industry average is 6.76%. MSFT outperforms 90% of its industry peers.
MSFT has a Return On Equity of 40.21%. This is amongst the best returns in the industry. The industry average is 11.69%. MSFT outperforms 91% of its industry peers.

MSFT's Profit Margin of 34.37% is amongst the best returns of the industry. MSFT outperforms 92% of its industry peers. The industry average Profit Margin is 12.03%.
MSFT has a Piotroski-F score of 6.00. This indicates an average health and profitability for MSFT.
VS Industry

ROA (19.4%) VS Industry: 90% outperformed.

0.16
102.42

ROE (40.21%) VS Industry: 91% outperformed.

0.28
278.50

Profit Margin (34.37%) VS Industry: 92% outperformed.

0.30
351.03

Valuation

Valuation Rating

2

MSFT's Price/Earning Ratio is in line with the industry average which is at 32.07.
With a Forward Price/Earnings Ratio of 21.76, MSFT is valued rather expensively.
When comparing the current price to the book value of MSFT, we can conclude it is valued correctly. It is trading at 10.64 times its book value.
Compared to an average industry Enterprise Value to EBITDA ratio of 21.81, MSFT is valued in line with its industry peers.

With a Price/Earnings Ratio of 26.74, MSFT can be considered very expensive at the moment.
The high PEG Ratio, which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
When comparing the price book ratio of MSFT to the average industry price book ratio of 3.27, MSFT is valued more expensive than its industry peers. 85% of the companies listed in the same industry are valued cheaper.
VS Industry

Price/Earnings (26.74) VS Industry: 58% outperformed.

3,997.00
0.22

Price/Book (10.64) VS Industry: 15% outperformed.

227.35
0.11

Enterprise Value/ EBITDA (17.41) VS Industry: 58% outperformed.

10,449.99
1.42

Growth

Growth Rating

6

The Earnings Per Share has grown by an nice 10.21% over the past year.
The Earnings Per Share has been growing by 22.69% on average over the past 5 years. This is a very strong growth
Based on estimates for the next 5 years, MSFT will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.10% on average per year.
MSFT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.22%.

The Revenue has been growing by 15.47% on average over the past 5 years. This is quite good.
The Revenue is expected to grow by 11.41% on average over the next 5 years. This is quite good.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming 5 years, we see that the growth is decreasing.
The Revenue growth is decreasing: in the next 5 years the growth will be less than in the last years.

PastFuture
5Y3Y1Y1Y2Y3Y5Y
EPS22.69% 24.65% 10.21% 5.88% 11.34% 13.59% 12.1%
Revenue15.47% 16.36% 15.22% 6.85% 9.89% 11.31% 11.41%

Health

Health Rating

6

MSFT has an Altman-Z score of 7.90. This indicates that MSFT is financially healthy and little risk of bankruptcy at the moment.
MSFT has one of the better Altman-Z scores in its industry. It is much better than the industry average of 1.81. MSFT has a better score than 82% of its industry peers.
A Current Ratio of 1.84 indicates that MSFT should not have too much problems paying its short term obligations.
MSFT has a Current Ratio comparable to the industry average, which is at 1.76.

A Quick Ratio of 1.79 indicates that MSFT should not have too much problems paying its short term obligations.
The Quick Ratio is in line with the industry averages, which is at 1.74.
MSFT has a Piotroski-F score of 6.00. This indicates an average health and profitability for MSFT.
When comparing the Debt to Equity Ratio of MSFT to the average industry Debt to Equity Ratio of 0.06, MSFT required more debt to finance its operations than its industry peers.
VS Industry

Debt/Equity (0.34) VS Industry: 31% outperformed.

51.02
0.00

Quick Ratio (1.79) VS Industry: 51% outperformed.

0.06
83.89

Current Ratio (1.84) VS Industry: 51% outperformed.

0.06
83.89

Altman-Z (7.9) VS Industry: 82% outperformed.

-485.88
226.02

Dividend

Dividend Rating

5

The dividend of MSFT is nicely growing with an annual growth rate of 10.37%!
26.58% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
MSFT has paid a dividend for at least 10 years, which is a reliable track record.
With a Yearly Dividend Yield of 1.13%, MSFT has a reasonable but not impressive dividend return.

MSFT's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
MSFT's Dividend Yield is slightly below the industry average, which is at 1.82.
With a Dividend Yield of 1.13, MSFT pays less dividend than the S&P500 average, which is at 2.41.
VS Industry

Dividend Yield (1.13%) VS Industry: 32% outperformed.

0.23
11.11

MICROSOFT CORP248.16

NASDAQ:MSFT (1/27/2023, 7:23:05 PM)+0.16 (+0.06%)

After market: 248.13 -0.03 (-0.01%)

Chartmill FA Rating
GICS Sector Information Technology
GICS IndustryGroup Software & Services
GICS Industry Software
Earnings (Last) 01-23 2023-01-23 Earnings (Next) 04-24 2023-04-24
Inst Owners 70.98% Inst Owner Change 0.18%
Ins Owners 0.04% Ins Owner Change 6.34%
Market Cap 1847.25B Analysts 84.56
Price Target 299.84 (20.83%)

Dividend
Dividend Yield 1.13% Dividend Growth 10.37%
DP 26.58% Ex-Date 02-15 2023-02-15 (0.68)

Surprises & Revisions
EPS beat(2) 1 Avg EPS beat(2) -2.3%
Min EPS beat(2) -4.64% Max EPS beat(2) 0.05%
EPS beat(4) 2 Avg EPS beat(4) 0.04%
Min EPS beat(4) -4.64% Max EPS beat(4) 5.15%
Revenue beat(2) N/A Avg Revenue beat(2) -1.99%
Min Revenue beat(2) -3.03% Max Revenue beat(2) -0.95%
Revenue beat(4) N/A Avg Revenue beat(4) -1.41%
Min Revenue beat(4) -3.03% Max Revenue beat(4) -0.32%
PT rev (1m) -1% EPS NQ rev (1m) N/A
EPS NY rev (1m) 0% Revenue NQ rev (1m) N/A
Revenue NY rev (1m) 0%

Valuation
Industry RankSector Rank
PE 26.74
Fwd PE 21.76
P/S 9.1
P/FCF 29.17
P/OCF 21.06
P/B 10.64
P/tB 19.38
EV/EBITDA 17.41
EPS(TTM) 9.28 EY 3.74%
EPS(NY) 11.41 Fwd EY 4.6%
FCF(TTM) 8.51 FCFY 3.43%
OCF(TTM) 11.78 OCFY 4.75%
SpS 27.28 BVpS 23.32
TBVpS 12.8 PEG (NY) 4.55
PEG (5Y) 1.18

Profitability
Industry RankSector Rank
ROA 19.4%
ROE 40.21%
ROIC 26.89%
ROICexc 44.36%
ROICexgc 84.34%
OM 41.69%
PM 34.37%
GM 68.26%
ROICexgc(3y) 99.41% ROICexcg growth 3Y -8.92%
ROICexcg growth 5Y -4.67% ROICexc(3y) 48.66%
ROICexc growth 3Y -0.67% ROICexc growth 5Y 2.65%
OM growth 3Y 7.2% OM growth 5Y 5.3%
PM growth 3Y 5.57% PM growth 5Y 6.81%
GM growth 3Y 1.25% GM growth 5Y 1.17%
F-Score 6 Asset Turnover 0.56

Health
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF 1
Debt/EBITDA 0.64
Cap/Depr 173.52%
Profit Quality 90.75%
Current Ratio 1.84
Quick Ratio 1.79
Altman-Z 7.9
F-Score 6 WACC 7.93%
ROIC/WACC 10.64 Cap/Depr(3y) 154.11%
Cap/Depr(5y) 138.98% Profit Quality(3y) 94.44%
Profit Quality(5y) 115.09%

Growth
EPS 1Y 10.21% EPS 3Y 24.65%
EPS 5Y 22.69% EPS growth Q2Q 3.52%
EPS Next Y 5.88% EPS Next 2Y 11.34%
EPS Next 3Y 13.59% EPS Next 5Y 12.1%
Revenue growth 1Y 15.22% Revenue growth 3Y 16.36%
Revenue growth 5Y 15.47% Revenue growth Q2Q 10.6%
Revenue Next Year 6.85% Revenue Next 2Y 9.89%
Revenue Next 3Y 11.31% Revenue Next 5Y 11.41%
EBIT growth 1Y 13.98% EBIT growth 3Y 24.74%
EBIT growth 5Y 21.59% EBIT Next Year 20.49%
EBIT Next 3Y 17.29% EBIT Next 5Y N/A
FCF growth 1Y 28.65% FCF growth 3Y 19.41%
FCF growth 5Y 15.73% OCF growth 1Y 32.48%
OCF growth 3Y 19.49% OCF growth 5Y 17.65%

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