MICROSOFT CORP (1MSFT.MI) Stock Fundamental Analysis
BIT:1MSFT - Euronext Milan - US5949181045 - Common Stock - Currency: EUR
Overall 1MSFT gets a fundamental rating of 7 out of 10. We evaluated 1MSFT against 94 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 correct valuation and a medium growth rate. This makes 1MSFT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
1MSFT had positive earnings in the past year.
1MSFT had a positive operating cash flow in the past year.
1MSFT had positive earnings in each of the past 5 years.
In the past 5 years 1MSFT always reported a positive cash flow from operatings.
1.2 Ratios
1MSFT has a better Return On Assets (17.37%) than 96.81% of its industry peers.
With an excellent Return On Equity value of 30.64%, 1MSFT belongs to the best of the industry, outperforming 92.55% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 22.54%, 1MSFT belongs to the top of the industry, outperforming 94.68% of the companies in the same industry.
1MSFT had an Average Return On Invested Capital over the past 3 years of 23.84%. This is significantly above the industry average of 11.00%.
| 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
Looking at the Profit Margin, with a value of 35.43%, 1MSFT belongs to the top of the industry, outperforming 96.81% of the companies in the same industry.
1MSFT's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 44.96%, 1MSFT belongs to the top of the industry, outperforming 98.94% of the companies in the same industry.
In the last couple of years the Operating Margin of 1MSFT has grown nicely.
Looking at the Gross Margin, with a value of 69.41%, 1MSFT is in line with its industry, outperforming 52.13% 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) well above the Cost of Capital (WACC), 1MSFT is creating value.
Compared to 1 year ago, 1MSFT has about the same amount of shares outstanding.
1MSFT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, 1MSFT has an improved debt to assets ratio.
2.2 Solvency
1MSFT has an Altman-Z score of 9.26. This indicates that 1MSFT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of 1MSFT (9.26) is better than 91.49% 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.
Looking at the Debt to FCF ratio, with a value of 1.16, 1MSFT is in the better half of the industry, outperforming 77.66% of the companies in the same industry.
1MSFT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
1MSFT has a Debt to Equity ratio of 0.24. This is in the better half of the industry: 1MSFT outperforms 61.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Altman-Z | 9.26 |
ROIC/WACC2.07
WACC10.91%
2.3 Liquidity
1MSFT has a Current Ratio of 1.35. This is a normal value and indicates that 1MSFT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.35, 1MSFT is in line with its industry, outperforming 54.26% of the companies in the same industry.
A Quick Ratio of 1.34 indicates that 1MSFT should not have too much problems paying its short term obligations.
1MSFT's Quick ratio of 1.34 is fine compared to the rest of the industry. 1MSFT outperforms 60.64% of its industry peers.
| 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.
The Earnings Per Share has been growing by 19.98% on average over the past years. This is quite good.
1MSFT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.04%.
Measured over the past years, 1MSFT shows a quite strong growth in Revenue. The Revenue has been growing by 14.26% on average per year.
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
Based on estimates for the next years, 1MSFT will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.79% on average per year.
The Revenue is expected to grow by 13.18% on average over the next years. This is quite good.
EPS Next Y13.15%
EPS Next 2Y13.44%
EPS Next 3Y14.7%
EPS Next 5Y14.79%
Revenue Next Year12.97%
Revenue Next 2Y13.24%
Revenue Next 3Y13.79%
Revenue Next 5Y13.18%
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
The Price/Earnings ratio is 31.18, which means the current valuation is very expensive for 1MSFT.
Based on the Price/Earnings ratio, 1MSFT is valued a bit cheaper than 68.09% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.79, 1MSFT is valued at the same level.
Based on the Price/Forward Earnings ratio of 25.49, the valuation of 1MSFT can be described as expensive.
Based on the Price/Forward Earnings ratio, 1MSFT is valued a bit cheaper than the industry average as 65.96% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of 1MSFT to the average of the S&P500 Index (21.38), we can say 1MSFT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.18 | ||
| Fwd PE | 25.49 |
4.2 Price Multiples
1MSFT's Enterprise Value to EBITDA is on the same level as the industry average.
1MSFT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 1MSFT is cheaper than 64.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.12 | ||
| EV/EBITDA | 19.5 |
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.
1MSFT's earnings are expected to grow with 14.70% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.37
PEG (5Y)1.56
EPS Next 2Y13.44%
EPS Next 3Y14.7%
5. Dividend
5.1 Amount
With a yearly dividend of 0.90%, 1MSFT is not a good candidate for dividend investing.
The stock price of 1MSFT dropped by -20.38% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 2.04, 1MSFT pays a better dividend. On top of this 1MSFT pays more dividend than 80.85% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.51, 1MSFT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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
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 2Y13.44%
EPS Next 3Y14.7%
BIT:1MSFT (4/25/2025, 7:00:00 PM)
340.5
+8.95 (+2.7%)
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 Cap2531.27B
Analysts85
Price Target466.15 (36.9%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
Yearly Dividend2.58
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)-3.85%
PT rev (3m)-5.68%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)0.93%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)0.62%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-2.08%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.18 | ||
| Fwd PE | 25.49 | ||
| P/S | 11 | ||
| P/FCF | 41.12 | ||
| P/OCF | 22.93 | ||
| P/B | 9.51 | ||
| P/tB | 18.21 | ||
| EV/EBITDA | 19.5 |
EPS(TTM)10.92
EY3.21%
EPS(NY)13.36
Fwd EY3.92%
FCF(TTM)8.28
FCFY2.43%
OCF(TTM)14.85
OCFY4.36%
SpS30.96
BVpS35.79
TBVpS18.7
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 | 9.26 |
F-Score6
WACC10.91%
ROIC/WACC2.07
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 Y13.15%
EPS Next 2Y13.44%
EPS Next 3Y14.7%
EPS Next 5Y14.79%
Revenue 1Y (TTM)15.04%
Revenue growth 3Y13.4%
Revenue growth 5Y14.26%
Sales Q2Q%12.27%
Revenue Next Year12.97%
Revenue Next 2Y13.24%
Revenue Next 3Y13.79%
Revenue Next 5Y13.18%
EBIT growth 1Y17.09%
EBIT growth 3Y16.11%
EBIT growth 5Y20.56%
EBIT Next Year40.13%
EBIT Next 3Y21.81%
EBIT Next 5Y19.44%
FCF growth 1Y17.47%
FCF growth 3Y9.69%
FCF growth 5Y14.13%
OCF growth 1Y48.82%
OCF growth 3Y15.6%
OCF growth 5Y17.83%