MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:MSF - US5949181045 - Common Stock
397.05 EUR
+14.7 (+3.84%)
We assign a fundamental rating of 7 out of 10 to MSF. MSF was compared to 119 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. These ratings would make MSF suitable 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.
- Each year in the past 5 years MSF has been profitable.
- MSF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of MSF (16.49%) is better than 88.24% of its industry peers.
- MSF's Return On Equity of 28.90% is amongst the best of the industry. MSF outperforms 83.19% of its industry peers.
- With an excellent Return On Invested Capital value of 22.25%, MSF belongs to the best of the industry, outperforming 92.44% 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 13.47%.
| 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 better Operating Margin (46.27%) than 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.
- MSF's Gross Margin has been stable in the last couple of years.
| 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
- MSF has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for MSF remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, MSF has less shares outstanding
- The debt/assets ratio for MSF has been reduced compared to a year ago.
2.2 Solvency
- MSF has an Altman-Z score of 9.13. This indicates that MSF is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 9.13, MSF belongs to the top of the industry, outperforming 86.55% of the companies in the same industry.
- 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.
- The Debt to FCF ratio of MSF (1.25) is better than 70.59% of its industry peers.
- A Debt/Equity ratio of 0.24 indicates that MSF is not too dependend on debt financing.
- MSF's Debt to Equity ratio of 0.24 is in line compared to the rest of the industry. MSF outperforms 53.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.13 |
ROIC/WACC2.02
WACC11%
2.3 Liquidity
- MSF has a Current Ratio of 1.40. This is a normal value and indicates that MSF is financially healthy and should not expect problems in meeting 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.
- Looking at the Quick ratio, with a value of 1.39, MSF is in line with its industry, outperforming 51.26% of the companies in the same 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
- The Earnings Per Share has grown by an nice 19.39% over the past year.
- 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.
- Looking at the last year, MSF shows a quite strong growth in Revenue. The Revenue has grown by 15.59% in the last year.
- Measured over the past years, MSF shows a quite strong growth in Revenue. The Revenue has been growing by 14.52% on average per year.
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
- Based on estimates for the next years, MSF will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.83% on average per year.
- The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
EPS Next Y22.64%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
EPS Next 5Y18.83%
Revenue Next Year17.06%
Revenue Next 2Y15.95%
Revenue Next 3Y16.09%
Revenue Next 5Y15.04%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last 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
- Based on the Price/Earnings ratio of 32.12, the valuation of MSF can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of MSF indicates a somewhat cheap valuation: MSF is cheaper than 62.18% of the companies listed in the same industry.
- MSF's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
- The Price/Forward Earnings ratio is 24.31, which indicates a rather expensive current valuation of MSF.
- Based on the Price/Forward Earnings ratio, MSF is valued a bit cheaper than the industry average as 64.71% of the companies are valued more expensively.
- MSF's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.12 | ||
| Fwd PE | 24.31 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MSF is on the same level as its industry peers.
- MSF's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.28 | ||
| EV/EBITDA | 18.48 |
4.3 Compensation for Growth
- MSF's 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 18.24% in the coming years.
PEG (NY)1.42
PEG (5Y)1.7
EPS Next 2Y18.39%
EPS Next 3Y18.24%
5. Dividend
5.1 Amount
- MSF has a yearly dividend return of 0.80%, which is pretty low.
- MSF's Dividend Yield is a higher than the industry average which is at 0.63.
- With a Dividend Yield of 0.80, MSF pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
- The dividend of MSF is nicely growing with an annual growth rate of 10.24%!
Dividend Growth(5Y)10.24%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- MSF pays out 23.52% of its income as dividend. This is a sustainable payout ratio.
- MSF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.52%
EPS Next 2Y18.39%
EPS Next 3Y18.24%
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 32.12 and the Price/Book (PB) ratio is 9.51.
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%.