MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:MSF - US5949181045 - Common Stock
396.05 EUR
+13.7 (+3.58%)
Overall MSF gets a fundamental rating of 7 out of 10. We evaluated MSF against 114 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 correct valuation and a medium growth rate. 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.
- In the past 5 years MSF has always been profitable.
- MSF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- MSF's Return On Assets of 16.49% is amongst the best of the industry. MSF outperforms 88.24% of its industry peers.
- MSF has a Return On Equity of 28.90%. This is amongst the best in the industry. MSF outperforms 83.19% of its industry peers.
- The Return On Invested Capital of MSF (22.25%) is better than 92.44% of its industry peers.
- MSF had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 13.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.49% | ||
| ROE | 28.9% | ||
| ROIC | 22.25% |
ROA(3y)17.07%
ROA(5y)17.9%
ROE(3y)32.52%
ROE(5y)36.88%
ROIC(3y)22.94%
ROIC(5y)23.52%
1.3 Margins
- The Profit Margin of MSF (35.71%) is better than 92.44% of its industry peers.
- MSF's Profit Margin has improved in the last couple of years.
- MSF has a Operating Margin of 46.27%. This is amongst the best in the industry. MSF outperforms 96.64% of its industry peers.
- MSF's Operating Margin has improved in the last couple of years.
- MSF has a Gross Margin of 68.76%. This is comparable to the rest of the industry: MSF outperforms 42.02% of its industry peers.
- In the last couple of years the Gross Margin of MSF has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.27% | ||
| PM (TTM) | 35.71% | ||
| GM | 68.76% |
OM growth 3Y2.75%
OM growth 5Y4.26%
PM growth 3Y-0.49%
PM growth 5Y3.14%
GM growth 3Y0.21%
GM growth 5Y0.31%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSF 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.
- Compared to 1 year ago, MSF has an improved debt to assets ratio.
2.2 Solvency
- MSF has an Altman-Z score of 9.42. This indicates that MSF is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of MSF (9.42) is better than 88.24% of its industry peers.
- MSF has a debt to FCF ratio of 1.25. This is a very positive value and a sign of high solvency as it would only need 1.25 years to pay back of all of its debts.
- MSF has a better Debt to FCF ratio (1.25) than 70.59% of its industry peers.
- A Debt/Equity ratio of 0.24 indicates that MSF is not too dependend on debt financing.
- 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 | 1.25 | ||
| Altman-Z | 9.42 |
ROIC/WACC2.02
WACC10.99%
2.3 Liquidity
- A Current Ratio of 1.40 indicates that MSF should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.40, MSF is in line with its industry, outperforming 47.90% of the companies in the same industry.
- A Quick Ratio of 1.39 indicates that MSF should not have too much problems paying its short term obligations.
- The Quick ratio of MSF (1.39) is comparable to the rest of the industry.
- The current and quick ratio evaluation for MSF 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 | 1.4 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
- MSF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.39%, which is quite good.
- Measured over the past years, MSF shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.86% on average per year.
- The Revenue has grown by 15.59% in the past year. This is quite good.
- MSF shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.52% yearly.
EPS 1Y (TTM)19.39%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%25.15%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.43%
3.2 Future
- MSF is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.83% yearly.
- Based on estimates for the next years, MSF will show a quite strong growth in Revenue. The Revenue will grow by 15.04% on average per year.
EPS Next Y22.79%
EPS Next 2Y18.47%
EPS Next 3Y18.31%
EPS Next 5Y18.83%
Revenue Next Year17.06%
Revenue Next 2Y15.95%
Revenue Next 3Y16.12%
Revenue Next 5Y15.04%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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
- With a Price/Earnings ratio of 32.15, MSF can be considered very expensive at the moment.
- Based on the Price/Earnings ratio, MSF is valued a bit cheaper than the industry average as 60.50% of the companies are valued more expensively.
- MSF is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 24.29, which indicates a rather expensive current valuation of MSF.
- MSF's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MSF is cheaper than 63.03% of the companies in the same industry.
- MSF's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.15 | ||
| Fwd PE | 24.29 |
4.2 Price Multiples
- MSF's Enterprise Value to EBITDA ratio is in line with the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as MSF.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.3 | ||
| EV/EBITDA | 19.22 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of MSF may justify a higher PE ratio.
- A more expensive valuation may be justified as MSF's earnings are expected to grow with 18.31% in the coming years.
PEG (NY)1.41
PEG (5Y)1.7
EPS Next 2Y18.47%
EPS Next 3Y18.31%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.81%, MSF is not a good candidate for dividend investing.
- MSF's Dividend Yield is a higher than the industry average which is at 0.68.
- Compared to an average S&P500 Dividend Yield of 1.81, MSF's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
- On average, the dividend of MSF grows each year by 10.24%, which is quite nice.
Dividend Growth(5Y)10.24%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- 23.52% 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.
DP23.52%
EPS Next 2Y18.47%
EPS Next 3Y18.31%
MICROSOFT CORP / MSF.DE FAQ
Can you provide the ChartMill fundamental rating for MICROSOFT CORP?
ChartMill assigns a fundamental rating of 7 / 10 to MSF.DE.
What is the valuation status for MSF stock?
ChartMill assigns a valuation rating of 4 / 10 to MICROSOFT CORP (MSF.DE). This can be considered as Fairly Valued.
Can you provide the profitability details for MICROSOFT CORP?
MICROSOFT CORP (MSF.DE) has a profitability rating of 8 / 10.
What is the valuation of MICROSOFT CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for MICROSOFT CORP (MSF.DE) is 32.15 and the Price/Book (PB) ratio is 9.52.
Can you provide the dividend sustainability for MSF stock?
The dividend rating of MICROSOFT CORP (MSF.DE) is 5 / 10 and the dividend payout ratio is 23.52%.