MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
FRA:MSF - Deutsche Boerse Ag - US5949181045 - Common Stock - Currency: EUR
Overall MSF gets a fundamental rating of 7 out of 10. We evaluated MSF against 101 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 has a decent growth rate and is not valued too expensively. With these ratings, MSF could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
MSF had positive earnings in the past year.
MSF had a positive operating cash flow in the past year.
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 (17.37%) is better than 95.96% of its industry peers.
MSF has a better Return On Equity (30.64%) than 89.90% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.54%, MSF belongs to the top of the industry, outperforming 92.93% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MSF 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
MSF has a better Profit Margin (35.43%) than 94.95% of its industry peers.
MSF's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 44.96%, MSF belongs to the top of the industry, outperforming 97.98% of the companies in the same industry.
In the last couple of years the Operating Margin of MSF has grown nicely.
Looking at the Gross Margin, with a value of 69.41%, MSF is in line with its industry, outperforming 48.48% of the companies in the same industry.
MSF'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
MSF has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MSF has about the same amout of shares outstanding than it did 1 year ago.
MSF has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MSF has an improved debt to assets ratio.
2.2 Solvency
MSF has an Altman-Z score of 9.32. This indicates that MSF is financially healthy and has little risk of bankruptcy at the moment.
MSF has a better Altman-Z score (9.32) than 89.90% of its industry peers.
MSF 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.
With a decent Debt to FCF ratio value of 1.16, MSF is doing good in the industry, outperforming 77.78% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that MSF is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.24, MSF is in line with its industry, outperforming 58.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Altman-Z | 9.32 |
ROIC/WACC1.78
WACC12.67%
2.3 Liquidity
MSF has a Current Ratio of 1.35. This is a normal value and indicates that MSF is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.35, MSF perfoms like the industry average, outperforming 53.54% of the companies in the same industry.
A Quick Ratio of 1.34 indicates that MSF should not have too much problems paying its short term obligations.
MSF has a Quick ratio (1.34) which is comparable to the rest of the industry.
MSF 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 | 1.35 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.30% over the past year.
MSF shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.98% yearly.
MSF shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.04%.
The Revenue has been growing by 14.26% on average over the past years. This is quite good.
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.
MSF 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
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
MSF is valuated quite expensively with a Price/Earnings ratio of 31.22.
MSF's Price/Earnings ratio is a bit cheaper when compared to the industry. MSF is cheaper than 71.72% of the companies in the same industry.
When comparing the Price/Earnings ratio of MSF to the average of the S&P500 Index (29.35), we can say MSF is valued inline with the index average.
A Price/Forward Earnings ratio of 25.44 indicates a quite expensive valuation of MSF.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MSF indicates a somewhat cheap valuation: MSF is cheaper than 65.66% of the companies listed in the same industry.
MSF's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.10.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.22 | ||
| Fwd PE | 25.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MSF is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
67.68% of the companies in the same industry are more expensive than MSF, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.16 | ||
| EV/EBITDA | 19.66 |
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.
A more expensive valuation may be justified as MSF's earnings are expected to grow with 14.77% in the coming years.
PEG (NY)2.37
PEG (5Y)1.56
EPS Next 2Y13.6%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
With a yearly dividend of 0.84%, MSF is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.92, MSF pays a better dividend. On top of this MSF pays more dividend than 81.82% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, MSF's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.84% |
5.2 History
The dividend of MSF is nicely growing with an annual growth rate of 10.19%!
Dividend Growth(5Y)10.19%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
24.68% of the earnings are spent on dividend by MSF. This is a low number and sustainable payout ratio.
The dividend of MSF is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.68%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
FRA:MSF (3/7/2025, 7:00:00 PM)
357.15
-12.3 (-3.33%)
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 Cap2655.05B
Analysts84.69
Price Target485.02 (35.8%)
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 Years6
Div Non Decr Years6
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)0.79%
PT rev (3m)0.87%
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 | 31.22 | ||
| Fwd PE | 25.44 | ||
| P/S | 11.01 | ||
| P/FCF | 41.16 | ||
| P/OCF | 22.95 | ||
| P/B | 9.52 | ||
| P/tB | 18.23 | ||
| 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 | 9.32 |
F-Score6
WACC12.67%
ROIC/WACC1.78
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%