MICROSOFT CORP (1MSFT.MI) Stock Fundamental Analysis
BIT:1MSFT - Euronext Milan - US5949181045 - Common Stock - Currency: EUR
Taking everything into account, 1MSFT scores 7 out of 10 in our fundamental rating. 1MSFT was compared to 100 industry peers in the Software industry. 1MSFT gets an excellent profitability rating and is at the same time showing great financial health properties. While showing a medium growth rate, 1MSFT is valued expensive at the moment. These ratings would make 1MSFT suitable for quality investing!
1. Profitability
1.1 Basic Checks
1MSFT had positive earnings in the past year.
In the past year 1MSFT had a positive cash flow from operations.
Each year in the past 5 years 1MSFT has been profitable.
In the past 5 years 1MSFT always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 17.18%, 1MSFT belongs to the top of the industry, outperforming 96.00% of the companies in the same industry.
The Return On Equity of 1MSFT (30.02%) is better than 90.00% of its industry peers.
1MSFT has a Return On Invested Capital of 22.17%. This is amongst the best in the industry. 1MSFT outperforms 95.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for 1MSFT is significantly above the industry average of 11.09%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.18% | ||
| ROE | 30.02% | ||
| ROIC | 22.17% |
ROA(3y)18.24%
ROA(5y)17.55%
ROE(3y)37.2%
ROE(5y)38.43%
ROIC(3y)23.84%
ROIC(5y)22.71%
1.3 Margins
Looking at the Profit Margin, with a value of 35.79%, 1MSFT belongs to the top of the industry, outperforming 97.00% of the companies in the same industry.
1MSFT's Profit Margin has improved in the last couple of years.
1MSFT's Operating Margin of 45.23% is amongst the best of the industry. 1MSFT outperforms 98.00% of its industry peers.
In the last couple of years the Operating Margin of 1MSFT has grown nicely.
The Gross Margin of 1MSFT (69.07%) is comparable to the rest of the industry.
1MSFT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.23% | ||
| PM (TTM) | 35.79% | ||
| GM | 69.07% |
OM growth 3Y2.39%
OM growth 5Y5.51%
PM growth 3Y-0.46%
PM growth 5Y2.89%
GM growth 3Y0.4%
GM growth 5Y1.15%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 1MSFT is creating value.
The number of shares outstanding for 1MSFT remains at a similar level compared to 1 year ago.
1MSFT has less shares outstanding than it did 5 years ago.
1MSFT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 11.06 indicates that 1MSFT is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 11.06, 1MSFT belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
The Debt to FCF ratio of 1MSFT is 1.18, which is an excellent value as it means it would take 1MSFT, only 1.18 years of fcf income to pay off all of its debts.
1MSFT has a better Debt to FCF ratio (1.18) than 80.00% of its industry peers.
1MSFT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of 1MSFT (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.18 | ||
| Altman-Z | 11.06 |
ROIC/WACC2.52
WACC8.78%
2.3 Liquidity
A Current Ratio of 1.37 indicates that 1MSFT should not have too much problems paying its short term obligations.
1MSFT has a Current ratio (1.37) which is comparable to the rest of the industry.
1MSFT has a Quick Ratio of 1.36. This is a normal value and indicates that 1MSFT is financially healthy and should not expect problems in meeting its short term obligations.
1MSFT has a Quick ratio (1.36) which is in line with its industry peers.
The current and quick ratio evaluation for 1MSFT is rather negative, while it does have 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 | 1.37 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.03% over the past year.
1MSFT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.98% yearly.
The Revenue has grown by 14.13% in the past year. This is quite good.
1MSFT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.26% yearly.
EPS 1Y (TTM)12.03%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%17.69%
Revenue 1Y (TTM)14.13%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%13.27%
3.2 Future
The Earnings Per Share is expected to grow by 15.57% on average over the next years. This is quite good.
1MSFT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.26% yearly.
EPS Next Y15.42%
EPS Next 2Y14.15%
EPS Next 3Y15.11%
EPS Next 5Y15.57%
Revenue Next Year13.95%
Revenue Next 2Y13.72%
Revenue Next 3Y13.94%
Revenue Next 5Y13.26%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
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 38.49, the valuation of 1MSFT can be described as expensive.
Based on the Price/Earnings ratio, 1MSFT is valued a bit cheaper than the industry average as 71.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.15, 1MSFT is valued a bit more expensive.
The Price/Forward Earnings ratio is 32.37, which means the current valuation is very expensive for 1MSFT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of 1MSFT is on the same level as its industry peers.
1MSFT's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.49 | ||
| Fwd PE | 32.37 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1MSFT is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1MSFT indicates a somewhat cheap valuation: 1MSFT is cheaper than 62.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.38 | ||
| EV/EBITDA | 24.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of 1MSFT may justify a higher PE ratio.
A more expensive valuation may be justified as 1MSFT's earnings are expected to grow with 15.11% in the coming years.
PEG (NY)2.5
PEG (5Y)1.93
EPS Next 2Y14.15%
EPS Next 3Y15.11%
5. Dividend
5.1 Amount
1MSFT has a yearly dividend return of 0.67%, which is pretty low.
1MSFT's Dividend Yield is a higher than the industry average which is at 2.13.
With a Dividend Yield of 0.67, 1MSFT pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
5.2 History
The dividend of 1MSFT is nicely growing with an annual growth rate of 10.19%!
Dividend Growth(5Y)10.19%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
1MSFT pays out 24.30% of its income as dividend. This is a sustainable payout ratio.
The dividend of 1MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.3%
EPS Next 2Y14.15%
EPS Next 3Y15.11%
BIT:1MSFT (6/27/2025, 7:00:00 PM)
425.65
+3.7 (+0.88%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.47%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap3163.66B
Analysts84.64
Price Target453.02 (6.43%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
Yearly Dividend2.5
Dividend Growth(5Y)10.19%
DP24.3%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.56%
Min EPS beat(2)1.79%
Max EPS beat(2)5.34%
EPS beat(4)3
Avg EPS beat(4)2.53%
Min EPS beat(4)-1.43%
Max EPS beat(4)5.34%
EPS beat(8)7
Avg EPS beat(8)3.7%
EPS beat(12)9
Avg EPS beat(12)2.65%
EPS beat(16)12
Avg EPS beat(16)3.43%
Revenue beat(2)1
Avg Revenue beat(2)-0.18%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)0.4%
Revenue beat(4)1
Avg Revenue beat(4)-0.53%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)0.4%
Revenue beat(8)2
Avg Revenue beat(8)-0.25%
Revenue beat(12)3
Avg Revenue beat(12)-0.56%
Revenue beat(16)5
Avg Revenue beat(16)-0.31%
PT rev (1m)0.45%
PT rev (3m)-6.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.76%
EPS NY rev (1m)0.03%
EPS NY rev (3m)1.99%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.55%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.49 | ||
| Fwd PE | 32.37 | ||
| P/S | 13.71 | ||
| P/FCF | 53.38 | ||
| P/OCF | 28.33 | ||
| P/B | 11.5 | ||
| P/tB | 20.73 | ||
| EV/EBITDA | 24.13 |
EPS(TTM)11.06
EY2.6%
EPS(NY)13.15
Fwd EY3.09%
FCF(TTM)7.97
FCFY1.87%
OCF(TTM)15.03
OCFY3.53%
SpS31.04
BVpS37
TBVpS20.53
PEG (NY)2.5
PEG (5Y)1.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.18% | ||
| ROE | 30.02% | ||
| ROCE | 27.24% | ||
| ROIC | 22.17% | ||
| ROICexc | 26.95% | ||
| ROICexgc | 44.08% | ||
| OM | 45.23% | ||
| PM (TTM) | 35.79% | ||
| GM | 69.07% | ||
| FCFM | 25.69% |
ROA(3y)18.24%
ROA(5y)17.55%
ROE(3y)37.2%
ROE(5y)38.43%
ROIC(3y)23.84%
ROIC(5y)22.71%
ROICexc(3y)35.43%
ROICexc(5y)40.49%
ROICexgc(3y)63.99%
ROICexgc(5y)78.75%
ROCE(3y)29.44%
ROCE(5y)28%
ROICexcg growth 3Y-19.4%
ROICexcg growth 5Y-12.98%
ROICexc growth 3Y-17.33%
ROICexc growth 5Y-7.77%
OM growth 3Y2.39%
OM growth 5Y5.51%
PM growth 3Y-0.46%
PM growth 5Y2.89%
GM growth 3Y0.4%
GM growth 5Y1.15%
F-Score5
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.18 | ||
| Debt/EBITDA | 0.5 | ||
| Cap/Depr | 209.15% | ||
| Cap/Sales | 22.72% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.3% | ||
| Profit Quality | 71.78% | ||
| Current Ratio | 1.37 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 11.06 |
F-Score5
WACC8.78%
ROIC/WACC2.52
Cap/Depr(3y)189.18%
Cap/Depr(5y)172.93%
Cap/Sales(3y)14.49%
Cap/Sales(5y)13.3%
Profit Quality(3y)85.27%
Profit Quality(5y)89.91%
High Growth Momentum
Growth
EPS 1Y (TTM)12.03%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%17.69%
EPS Next Y15.42%
EPS Next 2Y14.15%
EPS Next 3Y15.11%
EPS Next 5Y15.57%
Revenue 1Y (TTM)14.13%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%13.27%
Revenue Next Year13.95%
Revenue Next 2Y13.72%
Revenue Next 3Y13.94%
Revenue Next 5Y13.26%
EBIT growth 1Y15.48%
EBIT growth 3Y16.11%
EBIT growth 5Y20.56%
EBIT Next Year44.54%
EBIT Next 3Y24.22%
EBIT Next 5Y20.76%
FCF growth 1Y20.83%
FCF growth 3Y9.69%
FCF growth 5Y14.13%
OCF growth 1Y56.65%
OCF growth 3Y15.6%
OCF growth 5Y17.83%