MICROSOFT CORP-CDR (MSFT.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MSFT - CA59516M1041
34.05 CAD
+3.75 (+12.38%)
Overall MSFT gets a fundamental rating of 7 out of 10. We evaluated MSFT against 64 industry peers in the Software industry. MSFT has an excellent profitability rating, but there are some minor concerns on its financial health. MSFT may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make MSFT suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year MSFT was profitable.
In the past year MSFT had a positive cash flow from operations.
In the past 5 years MSFT has always been profitable.
In the past 5 years MSFT always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 17.37%, MSFT belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
MSFT has a Return On Equity of 30.64%. This is amongst the best in the industry. MSFT outperforms 93.94% of its industry peers.
With an excellent Return On Invested Capital value of 22.54%, MSFT belongs to the best of the industry, outperforming 92.42% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 11.99%.
| 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
MSFT's Profit Margin of 35.43% is amongst the best of the industry. MSFT outperforms 95.45% of its industry peers.
In the last couple of years the Profit Margin of MSFT has grown nicely.
The Operating Margin of MSFT (44.96%) is better than 98.48% of its industry peers.
In the last couple of years the Operating Margin of MSFT has grown nicely.
MSFT has a better Gross Margin (69.41%) than 69.70% of its industry peers.
MSFT'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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSFT is creating value.
The number of shares outstanding for MSFT remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MSFT has less shares outstanding
MSFT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.24 indicates that MSFT is not a great score, but indicates only limited risk for bankruptcy at the moment.
MSFT has a better Altman-Z score (2.24) than 63.64% of its industry peers.
MSFT 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.
MSFT's Debt to FCF ratio of 1.16 is fine compared to the rest of the industry. MSFT outperforms 78.79% of its industry peers.
MSFT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
MSFT has a Debt to Equity ratio (0.24) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.16 | ||
| Altman-Z | 2.24 |
ROIC/WACC1.95
WACC11.59%
2.3 Liquidity
A Current Ratio of 1.35 indicates that MSFT should not have too much problems paying its short term obligations.
MSFT has a Current ratio (1.35) which is comparable to the rest of the industry.
A Quick Ratio of 1.34 indicates that MSFT should not have too much problems paying its short term obligations.
MSFT's Quick ratio of 1.34 is in line compared to the rest of the industry. MSFT outperforms 57.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.30%, which is quite good.
The Earnings Per Share has been growing by 19.98% on average over the past years. This is quite good.
Looking at the last year, MSFT shows a quite strong growth in Revenue. The Revenue has grown by 15.04% in the last year.
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
MSFT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.82% yearly.
MSFT 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 2Y13.39%
Revenue Next 3Y13.84%
Revenue Next 5Y13.95%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
Based on the Price/Earnings ratio of 1.93, the valuation of MSFT can be described as very cheap.
Based on the Price/Earnings ratio, MSFT is valued cheaper than 98.48% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.17. MSFT is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 1.57, which indicates a rather cheap valuation of MSFT.
Based on the Price/Forward Earnings ratio, MSFT is valued cheaper than 96.97% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.79. MSFT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.93 | ||
| Fwd PE | 1.57 |
4.2 Price Multiples
98.48% of the companies in the same industry are more expensive than MSFT, based on the Enterprise Value to EBITDA ratio.
MSFT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MSFT is cheaper than 96.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.55 | ||
| EV/EBITDA | 0.77 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of MSFT may justify a higher PE ratio.
MSFT's earnings are expected to grow with 14.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.15
PEG (5Y)0.1
EPS Next 2Y13.6%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
With a yearly dividend of 0.80%, MSFT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 0.20, MSFT pays a better dividend. On top of this MSFT pays more dividend than 92.42% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, MSFT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
The dividend of MSFT is nicely growing with an annual growth rate of 10.19%!
MSFT has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)10.19%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
MSFT pays out 24.68% of its income as dividend. This is a sustainable payout ratio.
MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP24.68%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
TSX:MSFT (1/6/2026, 7:00:00 PM)
34.05
+3.75 (+12.38%)
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 Cap253.13B
Revenue(TTM)261.80B
Net Income(TTM)92.75B
Analysts84.92
Price TargetN/A
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
Yearly Dividend2.93
Dividend Growth(5Y)10.19%
DP24.68%
Div Incr YearsN/A
Div Non Decr YearsN/A
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)N/A
PT rev (3m)N/A
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)N/A
EPS NY rev (3m)N/A
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)N/A
Revenue NY rev (3m)N/A
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.93 | ||
| Fwd PE | 1.57 | ||
| P/S | 0.68 | ||
| P/FCF | 2.55 | ||
| P/OCF | 1.42 | ||
| P/B | 0.59 | ||
| P/tB | 1.13 | ||
| EV/EBITDA | 0.77 |
EPS(TTM)17.63
EY51.78%
EPS(NY)21.64
Fwd EY63.54%
FCF(TTM)13.37
FCFY39.27%
OCF(TTM)23.98
OCFY70.43%
SpS49.99
BVpS57.8
TBVpS30.19
PEG (NY)0.15
PEG (5Y)0.1
Graham NumberN/A
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%
ROICexgc growth 3Y-19.4%
ROICexgc 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 | 2.24 |
F-Score6
WACC11.59%
ROIC/WACC1.95
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 2Y13.39%
Revenue Next 3Y13.84%
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%
MICROSOFT CORP-CDR / MSFT.CA FAQ
Can you provide the ChartMill fundamental rating for MICROSOFT CORP-CDR?
ChartMill assigns a fundamental rating of 7 / 10 to MSFT.CA.
Can you provide the valuation status for MICROSOFT CORP-CDR?
ChartMill assigns a valuation rating of 9 / 10 to MICROSOFT CORP-CDR (MSFT.CA). This can be considered as Undervalued.
Can you provide the profitability details for MICROSOFT CORP-CDR?
MICROSOFT CORP-CDR (MSFT.CA) has a profitability rating of 9 / 10.
What is the financial health of MICROSOFT CORP-CDR (MSFT.CA) stock?
The financial health rating of MICROSOFT CORP-CDR (MSFT.CA) is 6 / 10.
What is the expected EPS growth for MICROSOFT CORP-CDR (MSFT.CA) stock?
The Earnings per Share (EPS) of MICROSOFT CORP-CDR (MSFT.CA) is expected to grow by 13.17% in the next year.