MICROSOFT CORP (MSF.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:MSF - US5949181045 - Common Stock
396.05 EUR
+13.7 (+3.58%)
Taking everything into account, MSF scores 7 out of 10 in our fundamental rating. MSF was compared to 119 industry peers in the Software industry. MSF gets an excellent profitability rating and is at the same time showing great financial health properties. MSF has a correct valuation and a medium growth rate. This makes MSF very considerable for quality investing!
1. Profitability
1.1 Basic Checks
- In the past year MSF was profitable.
- 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
- Looking at the Return On Assets, with a value of 16.49%, MSF belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 28.90%, MSF belongs to the top of the industry, outperforming 83.19% of the companies in the same industry.
- 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.
- MSF had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 13.47%.
| 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.
- Looking at the Operating Margin, with a value of 46.27%, MSF belongs to the top of the industry, outperforming 96.64% of the companies in the same industry.
- MSF's Operating Margin has improved in the last couple of years.
- The Gross Margin of MSF (68.76%) is comparable to the rest of the industry.
- 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.
- Compared to 5 years ago, MSF has less shares outstanding
- MSF has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 9.13 indicates that MSF is not in any danger for bankruptcy at the moment.
- The Altman-Z score of MSF (9.13) is better than 86.55% 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.
- MSF has a Debt to Equity ratio (0.24) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.13 |
ROIC/WACC2.02
WACC10.99%
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.
- The Current ratio of MSF (1.40) is comparable to the rest of the industry.
- MSF has a Quick Ratio of 1.39. This is a normal value and indicates that MSF is financially healthy and should not expect problems in meeting its short term obligations.
- MSF's Quick ratio of 1.39 is in line compared to the rest of the industry. MSF outperforms 51.26% of its industry peers.
- 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 | 1.4 | ||
| 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.
- MSF shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.59%.
- 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
- The Earnings Per Share is expected to grow by 18.83% 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 15.04% yearly.
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
- 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
- The Price/Earnings ratio is 32.04, which means the current valuation is very expensive for MSF.
- MSF's Price/Earnings ratio is a bit cheaper when compared to the industry. MSF is cheaper than 62.18% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, MSF is valued at the same level.
- Based on the Price/Forward Earnings ratio of 24.25, the valuation of MSF can be described as rather expensive.
- MSF's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MSF is cheaper than 64.71% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, MSF is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.04 | ||
| Fwd PE | 24.25 |
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.
- The rest of the industry has a similar Price/Free Cash Flow ratio as MSF.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.17 | ||
| 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.
- MSF's earnings are expected to grow with 18.24% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.42
PEG (5Y)1.7
EPS Next 2Y18.39%
EPS Next 3Y18.24%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.81%, MSF is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.63, MSF pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.81, MSF pays less dividend than the S&P500 average, which is at 1.82.
| 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
- MSF pays out 23.52% 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.
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 32.04 and the Price/Book (PB) ratio is 9.49.
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%.