487.48 USD
+0.38 (+0.08%)
488.9 USD
+1.42 (+0.29%)
We assign a fundamental rating of 7 out of 10 to MSFT. MSFT was compared to 276 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 has a decent growth rate and is not valued too expensively. Finally MSFT also has an excellent dividend rating. With these ratings, MSFT could be worth investigating further for dividend and quality investing!.
1. Profitability
1.1 Basic Checks
MSFT had positive earnings in the past year.
In the past year MSFT had a positive cash flow from operations.
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.
1.2 Ratios
The Return On Assets of MSFT (16.49%) is better than 92.75% of its industry peers.
The Return On Equity of MSFT (28.90%) is better than 92.03% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.25%, MSFT belongs to the top of the industry, outperforming 94.93% of the companies in the same industry.
MSFT had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 10.78%.
| 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 better Profit Margin (35.71%) than 92.03% of its industry peers.
In the last couple of years the Profit Margin of MSFT has grown nicely.
Looking at the Operating Margin, with a value of 46.27%, MSFT belongs to the top of the industry, outperforming 96.74% of the companies in the same industry.
MSFT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 68.76%, MSFT is in line with its industry, outperforming 50.72% 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 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
MSFT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MSFT has about the same amout of shares outstanding than it did 1 year ago.
MSFT has less shares outstanding than it did 5 years ago.
MSFT has a better debt/assets ratio than last year.
2.2 Solvency
MSFT has an Altman-Z score of 9.78. This indicates that MSFT is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.78, MSFT belongs to the top of the industry, outperforming 87.68% of the companies in the same industry.
The Debt to FCF ratio of MSFT is 1.25, which is an excellent value as it means it would take MSFT, only 1.25 years of fcf income to pay off all of its debts.
MSFT has a Debt to FCF ratio of 1.25. This is in the better half of the industry: MSFT outperforms 72.83% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that MSFT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.24, MSFT perfoms like the industry average, outperforming 43.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.78 |
ROIC/WACC2.05
WACC10.88%
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.
A Quick Ratio of 1.39 indicates that MSFT should not have too much problems paying its short term obligations.
MSFT has a Quick ratio of 1.39. This is comparable to the rest of the industry: MSFT outperforms 43.48% 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
The Earnings Per Share has grown by an nice 19.39% 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 15.59% in the past year. This is quite good.
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.
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 Y22.64%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
EPS Next 5Y18.83%
Revenue Next Year17.03%
Revenue Next 2Y15.87%
Revenue Next 3Y15.99%
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.
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
The Price/Earnings ratio is 33.69, which means the current valuation is very expensive for MSFT.
MSFT's Price/Earnings is on the same level as the industry average.
MSFT's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.77.
MSFT is valuated quite expensively with a Price/Forward Earnings ratio of 25.50.
Based on the Price/Forward Earnings ratio, MSFT is valued a bit cheaper than 65.94% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MSFT to the average of the S&P500 Index (23.35), we can say MSFT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.69 | ||
| Fwd PE | 25.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MSFT is valued a bit cheaper than 77.90% of the companies in the same industry.
60.51% of the companies in the same industry are more expensive than MSFT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.44 | ||
| EV/EBITDA | 20.16 |
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.
MSFT's earnings are expected to grow with 18.24% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.49
PEG (5Y)1.79
EPS Next 2Y18.39%
EPS Next 3Y18.24%
5. Dividend
5.1 Amount
MSFT has a yearly dividend return of 0.75%, which is pretty low.
Compared to an average industry Dividend Yield of 0.51, MSFT pays a better dividend. On top of this MSFT pays more dividend than 91.30% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, MSFT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
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 23.52% of its income as dividend. This is a sustainable payout ratio.
MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.52%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
487.48
+0.38 (+0.08%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners75.51%
Inst Owner Change1.57%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap3.62T
Revenue(TTM)293.81B
Net Income(TTM)104.91B
Analysts86
Price Target633.46 (29.95%)
Short Float %0.9%
Short Ratio2.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
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)-0.2%
PT rev (3m)2.77%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.34%
EPS NY rev (1m)4.86%
EPS NY rev (3m)5.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)0.54%
Revenue NY rev (3m)1.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.69 | ||
| Fwd PE | 25.5 | ||
| P/S | 12.33 | ||
| P/FCF | 46.44 | ||
| P/OCF | 24.64 | ||
| P/B | 9.98 | ||
| P/tB | 16.3 | ||
| EV/EBITDA | 20.16 |
EPS(TTM)14.47
EY2.97%
EPS(NY)19.12
Fwd EY3.92%
FCF(TTM)10.5
FCFY2.15%
OCF(TTM)19.78
OCFY4.06%
SpS39.53
BVpS48.85
TBVpS29.92
PEG (NY)1.49
PEG (5Y)1.79
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 | 9.78 |
F-Score6
WACC10.88%
ROIC/WACC2.05
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 Y22.64%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
EPS Next 5Y18.83%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.43%
Revenue Next Year17.03%
Revenue Next 2Y15.87%
Revenue Next 3Y15.99%
Revenue Next 5Y15.04%
EBIT growth 1Y20.2%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year58.37%
EBIT Next 3Y29.48%
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 33.69 and the Price/Book (PB) ratio is 9.98.
What is the earnings growth outlook for MICROSOFT CORP?
The Earnings per Share (EPS) of MICROSOFT CORP (MSFT) is expected to grow by 22.64% in the next year.