MICROSOFT CORP (1MSFT.MI) Stock Fundamental Analysis
BIT:1MSFT - Euronext Milan - US5949181045 - Common Stock - Currency: EUR
We assign a fundamental rating of 7 out of 10 to 1MSFT. 1MSFT was compared to 101 industry peers in the Software industry. 1MSFT has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. 1MSFT has a decent growth rate and is not valued too expensively. These ratings could make 1MSFT a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year 1MSFT was profitable.
In the past year 1MSFT had a positive cash flow from operations.
In the past 5 years 1MSFT has always been profitable.
Each year in the past 5 years 1MSFT had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 17.37%, 1MSFT belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
1MSFT has a better Return On Equity (30.64%) than 90.91% of its industry peers.
The Return On Invested Capital of 1MSFT (22.54%) is better than 93.94% of its industry peers.
1MSFT had an Average Return On Invested Capital over the past 3 years of 23.84%. This is significantly above the industry average of 11.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.37% | ||
| ROE | 30.64% | ||
| ROIC | 22.54% |
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
1MSFT has a better Profit Margin (35.43%) than 95.96% of its industry peers.
1MSFT's Profit Margin has improved in the last couple of years.
The Operating Margin of 1MSFT (44.96%) is better than 98.99% of its industry peers.
In the last couple of years the Operating Margin of 1MSFT has grown nicely.
With a Gross Margin value of 69.41%, 1MSFT perfoms like the industry average, outperforming 49.49% of the companies in the same industry.
1MSFT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.96% | ||
| PM (TTM) | 35.43% | ||
| GM | 69.41% |
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) just above the Cost of Capital (WACC), 1MSFT is creating some value.
The number of shares outstanding for 1MSFT remains at a similar level compared to 1 year ago.
The number of shares outstanding for 1MSFT has been reduced compared to 5 years ago.
The debt/assets ratio for 1MSFT has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 9.31 indicates that 1MSFT is not in any danger for bankruptcy at the moment.
The Altman-Z score of 1MSFT (9.31) is better than 88.89% of its industry peers.
1MSFT has a debt to FCF ratio of 1.16. This is a very positive value and a sign of high solvency as it would only need 1.16 years to pay back of all of its debts.
1MSFT has a better Debt to FCF ratio (1.16) than 78.79% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that 1MSFT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.24, 1MSFT perfoms like the industry average, outperforming 59.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Altman-Z | 9.31 |
ROIC/WACC1.63
WACC13.84%
2.3 Liquidity
A Current Ratio of 1.35 indicates that 1MSFT should not have too much problems paying its short term obligations.
With a Current ratio value of 1.35, 1MSFT perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
1MSFT has a Quick Ratio of 1.34. This is a normal value and indicates that 1MSFT is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.34, 1MSFT perfoms like the industry average, outperforming 59.60% of the companies in the same industry.
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 | 1.35 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
1MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.30%, which is quite good.
Measured over the past years, 1MSFT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 19.98% on average per year.
The Revenue has grown by 15.04% 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)12.3%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%10.24%
Revenue 1Y (TTM)15.04%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%12.27%
3.2 Future
The Earnings Per Share is expected to grow by 14.82% 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 13.95% yearly.
EPS Next Y13.17%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
EPS Next 5Y14.82%
Revenue Next Year13.05%
Revenue Next 2Y13.41%
Revenue Next 3Y13.87%
Revenue Next 5Y13.95%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 31.21 indicates a quite expensive valuation of 1MSFT.
Based on the Price/Earnings ratio, 1MSFT is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
1MSFT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 25.43, which means the current valuation is very expensive for 1MSFT.
66.67% of the companies in the same industry are more expensive than 1MSFT, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, 1MSFT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.21 | ||
| Fwd PE | 25.43 |
4.2 Price Multiples
1MSFT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. 1MSFT is cheaper than 64.65% of the companies in the same industry.
1MSFT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 1MSFT is cheaper than 68.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.14 | ||
| EV/EBITDA | 19.66 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates 1MSFT does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of 1MSFT may justify a higher PE ratio.
1MSFT's earnings are expected to grow with 14.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.37
PEG (5Y)1.56
EPS Next 2Y13.6%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
1MSFT has a yearly dividend return of 0.84%, which is pretty low.
Compared to an average industry Dividend Yield of 2.92, 1MSFT pays a better dividend. On top of this 1MSFT pays more dividend than 80.81% of the companies listed in the same industry.
With a Dividend Yield of 0.84, 1MSFT pays less dividend than the S&P500 average, which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
5.2 History
On average, the dividend of 1MSFT grows each year by 10.19%, which is quite nice.
Dividend Growth(5Y)10.19%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
24.68% of the earnings are spent on dividend by 1MSFT. This is a low number and sustainable payout ratio.
1MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP24.68%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
BIT:1MSFT (3/7/2025, 7:00:00 PM)
357
-12.6 (-3.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.18%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap2653.93B
Analysts84.69
Price Target484.83 (35.81%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
Yearly Dividend2.7
Dividend Growth(5Y)10.19%
DP24.68%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.11%
Min EPS beat(2)1.79%
Max EPS beat(2)4.43%
EPS beat(4)3
Avg EPS beat(4)1.76%
Min EPS beat(4)-1.43%
Max EPS beat(4)4.43%
EPS beat(8)7
Avg EPS beat(8)3.99%
EPS beat(12)8
Avg EPS beat(12)2.17%
EPS beat(16)12
Avg EPS beat(16)3.56%
Revenue beat(2)0
Avg Revenue beat(2)-0.54%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.32%
Revenue beat(4)0
Avg Revenue beat(4)-0.7%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)-0.26%
Revenue beat(8)2
Avg Revenue beat(8)-0.1%
Revenue beat(12)2
Avg Revenue beat(12)-0.7%
Revenue beat(16)4
Avg Revenue beat(16)-0.36%
PT rev (1m)0.72%
PT rev (3m)1.77%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)0.64%
EPS NY rev (1m)0.87%
EPS NY rev (3m)0.61%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-2.03%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.21 | ||
| Fwd PE | 25.43 | ||
| P/S | 11.01 | ||
| P/FCF | 41.14 | ||
| P/OCF | 22.94 | ||
| P/B | 9.52 | ||
| P/tB | 18.22 | ||
| EV/EBITDA | 19.66 |
EPS(TTM)11.44
EY3.2%
EPS(NY)14.04
Fwd EY3.93%
FCF(TTM)8.68
FCFY2.43%
OCF(TTM)15.56
OCFY4.36%
SpS32.44
BVpS37.5
TBVpS19.59
PEG (NY)2.37
PEG (5Y)1.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.37% | ||
| ROE | 30.64% | ||
| ROCE | 27.7% | ||
| ROIC | 22.54% | ||
| ROICexc | 27.11% | ||
| ROICexgc | 45.87% | ||
| OM | 44.96% | ||
| PM (TTM) | 35.43% | ||
| GM | 69.41% | ||
| FCFM | 26.75% |
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-Score6
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 208.71% | ||
| Cap/Sales | 21.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.01% | ||
| Profit Quality | 75.51% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 9.31 |
F-Score6
WACC13.84%
ROIC/WACC1.63
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)12.3%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%10.24%
EPS Next Y13.17%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
EPS Next 5Y14.82%
Revenue 1Y (TTM)15.04%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%12.27%
Revenue Next Year13.05%
Revenue Next 2Y13.41%
Revenue Next 3Y13.87%
Revenue Next 5Y13.95%
EBIT growth 1Y17.09%
EBIT growth 3Y16.11%
EBIT growth 5Y20.56%
EBIT Next Year40.23%
EBIT Next 3Y23.1%
EBIT Next 5Y19.13%
FCF growth 1Y17.47%
FCF growth 3Y9.69%
FCF growth 5Y14.13%
OCF growth 1Y48.82%
OCF growth 3Y15.6%
OCF growth 5Y17.83%