MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
FRA:MSF - Deutsche Boerse Ag - US5949181045 - Common Stock - Currency: EUR
We assign a fundamental rating of 7 out of 10 to MSF. MSF was compared to 100 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. While showing a medium growth rate, MSF is valued expensive at the moment. These ratings could make MSF a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
MSF had positive earnings in the past year.
In the past year MSF had a positive cash flow from operations.
MSF had positive earnings in each of the past 5 years.
Each year in the past 5 years MSF had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 17.18%, MSF belongs to the top of the industry, outperforming 97.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 30.02%, MSF belongs to the top of the industry, outperforming 91.00% of the companies in the same industry.
MSF's Return On Invested Capital of 22.17% is amongst the best of the industry. MSF outperforms 96.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MSF is significantly above the industry average of 11.09%.
| 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 Profit Margin of 35.79%. This is amongst the best in the industry. MSF outperforms 98.00% 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 45.23%, MSF belongs to the top of the industry, outperforming 99.00% of the companies in the same industry.
In the last couple of years the Operating Margin of MSF has grown nicely.
MSF has a Gross Margin of 69.07%. This is comparable to the rest of the industry: MSF outperforms 49.00% 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 | 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSF is creating value.
MSF has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for MSF has been reduced compared to 5 years ago.
MSF has a better debt/assets ratio than last year.
2.2 Solvency
MSF has an Altman-Z score of 11.08. This indicates that MSF is financially healthy and has little risk of bankruptcy at the moment.
MSF has a Altman-Z score of 11.08. This is amongst the best in the industry. MSF outperforms 89.00% of its industry peers.
MSF has a debt to FCF ratio of 1.18. This is a very positive value and a sign of high solvency as it would only need 1.18 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.18, MSF belongs to the best of the industry, outperforming 81.00% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that MSF is not too dependend on debt financing.
MSF has a better Debt to Equity ratio (0.24) than 61.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.18 | ||
| Altman-Z | 11.08 |
ROIC/WACC2.51
WACC8.83%
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.
The Current ratio of MSF (1.37) is comparable to the rest of the industry.
MSF has a Quick Ratio of 1.36. 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 Quick ratio (1.36) 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 | 1.37 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.03% over the past year.
The Earnings Per Share has been growing by 19.98% on average over the past years. This is quite good.
The Revenue has grown by 14.13% in the past year. This is quite good.
The Revenue has been growing by 14.26% on average over the past years. This is quite good.
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 Y15.42%
EPS Next 2Y14.15%
EPS Next 3Y15.11%
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.
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 38.41, MSF can be considered very expensive at the moment.
74.00% of the companies in the same industry are more expensive than MSF, based on the Price/Earnings ratio.
MSF is valuated rather expensively when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 32.29, MSF can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MSF is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, MSF is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.41 | ||
| Fwd PE | 32.29 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSF.
63.00% 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 | 53.25 | ||
| EV/EBITDA | 24.18 |
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 MSF may justify a higher PE ratio.
MSF's earnings are expected to grow with 15.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.49
PEG (5Y)1.92
EPS Next 2Y14.15%
EPS Next 3Y15.11%
5. Dividend
5.1 Amount
MSF has a yearly dividend return of 0.67%, which is pretty low.
Compared to an average industry Dividend Yield of 2.13, MSF pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.67, MSF pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
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
24.30% 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.
DP24.3%
EPS Next 2Y14.15%
EPS Next 3Y15.11%
FRA:MSF (7/4/2025, 5:29:44 PM)
421.775
-1.98 (-0.47%)
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 Cap3134.86B
Analysts84.64
Price Target453.24 (7.46%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
Yearly Dividend2.5
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)0.52%
PT rev (3m)-3.07%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.81%
EPS NY rev (1m)0.03%
EPS NY rev (3m)2.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.58%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.41 | ||
| Fwd PE | 32.29 | ||
| P/S | 13.68 | ||
| P/FCF | 53.25 | ||
| P/OCF | 28.26 | ||
| P/B | 11.47 | ||
| P/tB | 20.68 | ||
| EV/EBITDA | 24.18 |
EPS(TTM)10.98
EY2.6%
EPS(NY)13.06
Fwd EY3.1%
FCF(TTM)7.92
FCFY1.88%
OCF(TTM)14.93
OCFY3.54%
SpS30.83
BVpS36.76
TBVpS20.39
PEG (NY)2.49
PEG (5Y)1.92
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 | 11.08 |
F-Score5
WACC8.83%
ROIC/WACC2.51
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 Y15.42%
EPS Next 2Y14.15%
EPS Next 3Y15.11%
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%