MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
FRA:MSF - Deutsche Boerse Ag - US5949181045 - Common Stock - Currency: EUR
MSF gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 99 industry peers in the Software industry. Both the health and profitability get an excellent rating, making MSF a very profitable company, without any liquidiy or solvency issues. MSF is not valued too expensively and it also shows a decent growth rate. These ratings could make MSF a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year MSF was profitable.
In the past year MSF had a positive cash flow from operations.
Each year in the past 5 years MSF has been profitable.
Each year in the past 5 years MSF had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MSF (17.18%) is better than 94.95% of its industry peers.
With an excellent Return On Equity value of 30.02%, MSF belongs to the best of the industry, outperforming 89.90% of the companies in the same industry.
MSF has a better Return On Invested Capital (22.17%) than 94.95% of its industry peers.
MSF had an Average Return On Invested Capital over the past 3 years of 23.84%. This is significantly above the industry average of 10.83%.
| 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
MSF has a better Profit Margin (35.79%) than 96.97% of its industry peers.
MSF's Profit Margin has improved in the last couple of years.
MSF's Operating Margin of 45.23% is amongst the best of the industry. MSF outperforms 98.99% of its industry peers.
In the last couple of years the Operating Margin of MSF has grown nicely.
The Gross Margin of MSF (69.07%) is comparable to the rest of the industry.
MSF'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
MSF has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, MSF has about the same amount of shares outstanding.
MSF has less shares outstanding than it did 5 years ago.
MSF has a better debt/assets ratio than last year.
2.2 Solvency
MSF has an Altman-Z score of 11.32. This indicates that MSF is financially healthy and has little risk of bankruptcy at the moment.
MSF has a Altman-Z score of 11.32. This is amongst the best in the industry. MSF outperforms 90.91% of its industry peers.
The Debt to FCF ratio of MSF is 1.18, which is an excellent value as it means it would take MSF, only 1.18 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.18, MSF is in the better half of the industry, outperforming 79.80% of the companies in the same industry.
MSF 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 MSF (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.18 | ||
| Altman-Z | 11.32 |
ROIC/WACC2.07
WACC10.71%
2.3 Liquidity
MSF has a Current Ratio of 1.37. This is a normal value and indicates that MSF is financially healthy and should not expect problems in meeting its short term obligations.
MSF has a Current ratio of 1.37. This is comparable to the rest of the industry: MSF outperforms 55.56% of its industry peers.
A Quick Ratio of 1.36 indicates that MSF should not have too much problems paying its short term obligations.
MSF has a better Quick ratio (1.36) than 60.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
MSF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.03%, which is quite good.
The Earnings Per Share has been growing by 19.98% on average over the past years. This is quite good.
MSF shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.13%.
Measured over the past years, MSF shows a quite strong growth in Revenue. The Revenue has been growing by 14.26% on average per year.
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
Based on estimates for the next years, MSF will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.57% on average per year.
Based on estimates for the next years, MSF will show a quite strong growth in Revenue. The Revenue will grow by 13.26% on average per year.
EPS Next Y15.43%
EPS Next 2Y14.17%
EPS Next 3Y15.07%
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.
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 39.18, which means the current valuation is very expensive for MSF.
70.71% of the companies in the same industry are more expensive than MSF, based on the Price/Earnings ratio.
MSF's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.50.
A Price/Forward Earnings ratio of 32.95 indicates a quite expensive valuation of MSF.
Based on the Price/Forward Earnings ratio, MSF is valued a bit cheaper than the industry average as 60.61% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, MSF is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.18 | ||
| Fwd PE | 32.95 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSF.
Based on the Price/Free Cash Flow ratio, MSF is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.35 | ||
| EV/EBITDA | 24.8 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MSF does not grow enough to justify the current Price/Earnings ratio.
MSF has an outstanding profitability rating, which may justify a higher PE ratio.
MSF's earnings are expected to grow with 15.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.54
PEG (5Y)1.96
EPS Next 2Y14.17%
EPS Next 3Y15.07%
5. Dividend
5.1 Amount
With a yearly dividend of 0.66%, MSF is not a good candidate for dividend investing.
MSF's Dividend Yield is a higher than the industry average which is at 2.06.
With a Dividend Yield of 0.66, MSF pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
5.2 History
On average, the dividend of MSF grows each year by 10.19%, which is quite nice.
Dividend Growth(5Y)10.19%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
MSF pays out 24.30% of its income as dividend. This is a sustainable payout ratio.
The dividend of MSF is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.3%
EPS Next 2Y14.17%
EPS Next 3Y15.07%
FRA:MSF (7/18/2025, 7:00:00 PM)
438.05
-4 (-0.9%)
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 Cap3255.82B
Analysts84.41
Price Target453.24 (3.47%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
Yearly Dividend2.51
Dividend Growth(5Y)10.19%
DP24.3%
Div Incr Years6
Div Non Decr Years6
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%
PT rev (3m)-2.78%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)1.15%
EPS NY rev (1m)0.04%
EPS NY rev (3m)2.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.9%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.18 | ||
| Fwd PE | 32.95 | ||
| P/S | 13.96 | ||
| P/FCF | 54.35 | ||
| P/OCF | 28.84 | ||
| P/B | 11.71 | ||
| P/tB | 21.11 | ||
| EV/EBITDA | 24.8 |
EPS(TTM)11.18
EY2.55%
EPS(NY)13.29
Fwd EY3.03%
FCF(TTM)8.06
FCFY1.84%
OCF(TTM)15.19
OCFY3.47%
SpS31.37
BVpS37.4
TBVpS20.75
PEG (NY)2.54
PEG (5Y)1.96
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 | 11.32 |
F-Score5
WACC10.71%
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)12.03%
EPS 3Y14.01%
EPS 5Y19.98%
EPS Q2Q%17.69%
EPS Next Y15.43%
EPS Next 2Y14.17%
EPS Next 3Y15.07%
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%