423.37 USD
-6.92 (-1.61%)
At close: Feb 2, 2026
423.9 USD
+0.53 (+0.13%)
After Hours: 2/2/2026, 8:25:29 PM
Taking everything into account, MSFT scores 7 out of 10 in our fundamental rating. MSFT was compared to 278 industry peers in the Software industry. Both the health and profitability get an excellent rating, making MSFT a very profitable company, without any liquidiy or solvency issues. MSFT is growing strongly while it is still valued neutral. This is a good combination! MSFT also has an excellent dividend rating. With these ratings, MSFT could be worth investigating further for dividend and growth 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.
- MSFT had positive earnings in each of the past 5 years.
- MSFT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 17.93%, MSFT belongs to the top of the industry, outperforming 93.88% of the companies in the same industry.
- MSFT has a better Return On Equity (30.51%) than 92.45% of its industry peers.
- MSFT has a better Return On Invested Capital (21.86%) than 94.60% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 10.76%.
| Industry Rank | Sector 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%
1.3 Margins
- MSFT has a Profit Margin of 39.04%. This is amongst the best in the industry. MSFT outperforms 92.81% of its industry peers.
- MSFT's Profit Margin has improved in the last couple of years.
- MSFT has a Operating Margin of 46.67%. This is amongst the best in the industry. MSFT outperforms 96.76% of its industry peers.
- In the last couple of years the Operating Margin of MSFT has grown nicely.
- The Gross Margin of MSFT (68.59%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of MSFT has remained more or less at the same level.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSFT 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.
- Compared to 1 year ago, MSFT has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.84 indicates that MSFT is not in any danger for bankruptcy at the moment.
- The Altman-Z score of MSFT (8.84) is better than 89.57% of its industry peers.
- 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.
- The Debt to FCF ratio of MSFT (1.30) is better than 72.30% of its industry peers.
- A Debt/Equity ratio of 0.23 indicates that MSFT is not too dependend on debt financing.
- MSFT's Debt to Equity ratio of 0.23 is in line compared to the rest of the industry. MSFT outperforms 43.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.3 | ||
| Altman-Z | 8.84 |
ROIC/WACC1.98
WACC11.03%
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.
- MSFT's Current ratio of 1.39 is in line compared to the rest of the industry. MSFT outperforms 43.17% of its industry peers.
- A Quick Ratio of 1.38 indicates that MSFT should not have too much problems paying its short term obligations.
- MSFT has a Quick ratio of 1.38. This is comparable to the rest of the industry: MSFT outperforms 42.81% 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 | 1.39 | ||
| Quick Ratio | 1.38 |
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.
- The Earnings Per Share has been growing by 18.86% on average over the past years. This is quite good.
- Looking at the last year, MSFT shows a quite strong growth in Revenue. The Revenue has grown by 16.67% in the last year.
- Measured over the past years, MSFT shows a quite strong growth in Revenue. The Revenue has been growing by 14.52% on average per year.
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
- The Earnings Per Share is expected to grow by 18.83% on average over the next years. This is quite good.
- Based on estimates for the next years, MSFT will show a quite strong growth in Revenue. The Revenue will grow by 15.04% on average per year.
EPS Next Y22.79%
EPS Next 2Y18.47%
EPS Next 3Y18.31%
EPS Next 5Y18.83%
Revenue Next Year17.06%
Revenue Next 2Y15.95%
Revenue Next 3Y16.12%
Revenue Next 5Y15.04%
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.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 27.53, the valuation of MSFT can be described as expensive.
- Based on the Price/Earnings ratio, MSFT is valued a bit cheaper than 61.51% 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 28.41, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 22.12, the valuation of MSFT can be described as rather expensive.
- 65.47% of the companies in the same industry are more expensive than MSFT, based on the Price/Forward Earnings ratio.
- MSFT is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.64, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.53 | ||
| Fwd PE | 22.12 |
4.2 Price Multiples
- 78.06% 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 Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.65 | ||
| EV/EBITDA | 17.48 |
4.3 Compensation for Growth
- MSFT's 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 18.31% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.21
PEG (5Y)1.46
EPS Next 2Y18.47%
EPS Next 3Y18.31%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.85%, MSFT is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.56, MSFT pays a better dividend. On top of this MSFT pays more dividend than 90.65% of the companies listed in the same industry.
- With a Dividend Yield of 0.85, MSFT pays less dividend than the S&P500 average, which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
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 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
5.3 Sustainability
- MSFT pays out 21.19% of its income as dividend. This is a sustainable payout ratio.
- The dividend of MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP21.19%
EPS Next 2Y18.47%
EPS Next 3Y18.31%
423.37
-6.92 (-1.61%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)01-28 2026-01-28/amc
Earnings (Next)04-28 2026-04-28/amc
Inst Owners75.56%
Inst Owner Change-2.49%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap3.15T
Revenue(TTM)305.45B
Net Income(TTM)119.26B
Analysts85.97
Price Target632.72 (49.45%)
Short Float %0.71%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP21.19%
Div Incr Years20
Div Non Decr Years20
Ex-Date02-19 2026-02-19 (0.91)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.37%
Min EPS beat(2)2.28%
Max EPS beat(2)10.46%
EPS beat(4)4
Avg EPS beat(4)6.07%
Min EPS beat(4)2.28%
Max EPS beat(4)10.46%
EPS beat(8)7
Avg EPS beat(8)3.92%
EPS beat(12)11
Avg EPS beat(12)4.68%
EPS beat(16)12
Avg EPS beat(16)3.14%
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)-0.12%
PT rev (3m)1.32%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)4.08%
EPS NY rev (1m)0.12%
EPS NY rev (3m)5.98%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.73%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)1.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.53 | ||
| Fwd PE | 22.12 | ||
| P/S | 10.3 | ||
| P/FCF | 40.65 | ||
| P/OCF | 19.6 | ||
| P/B | 8.05 | ||
| P/tB | 12.54 | ||
| EV/EBITDA | 17.48 |
EPS(TTM)15.38
EY3.63%
EPS(NY)19.14
Fwd EY4.52%
FCF(TTM)10.42
FCFY2.46%
OCF(TTM)21.6
OCFY5.1%
SpS41.1
BVpS52.59
TBVpS33.77
PEG (NY)1.21
PEG (5Y)1.46
Graham Number134.9
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 8.84 |
F-Score6
WACC11.03%
ROIC/WACC1.98
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 Y22.79%
EPS Next 2Y18.47%
EPS Next 3Y18.31%
EPS Next 5Y18.83%
Revenue 1Y (TTM)16.67%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%16.72%
Revenue Next Year17.06%
Revenue Next 2Y15.95%
Revenue Next 3Y16.12%
Revenue Next 5Y15.04%
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 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 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 22.79% in the next year.