MICROSOFT CORP-CDR (MSFT.CA) Stock Fundamental Analysis
Canada - TSX:MSFT - CA59516M1041
35.54 CAD
+5.24 (+17.29%)
MSFT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 63 industry peers in the Software industry. MSFT has an excellent profitability rating, but there are some minor concerns on its financial health. MSFT scores decently on growth, while it is valued quite cheap. This could make an interesting combination. With these ratings, MSFT could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
MSFT had positive earnings in the past year.
In the past year MSFT had a positive cash flow from operations.
In the past 5 years MSFT has always been profitable.
MSFT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MSFT has a Return On Assets of 17.37%. This is amongst the best in the industry. MSFT outperforms 93.94% of its industry peers.
With an excellent Return On Equity value of 30.64%, MSFT belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
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 12.38%.
| 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.
Looking at the Operating Margin, with a value of 44.96%, MSFT belongs to the top of the industry, outperforming 98.48% of the companies in the same industry.
In the last couple of years the Operating Margin of MSFT has grown nicely.
Looking at the Gross Margin, with a value of 69.41%, MSFT is in the better half of the industry, outperforming 69.70% of the companies in the same industry.
In the last couple of years the Gross Margin of MSFT has remained more or less at the same level.
| 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.
MSFT has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for MSFT has been reduced compared to 5 years ago.
The debt/assets ratio for MSFT has been reduced compared to a year ago.
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.
Looking at the Altman-Z score, with a value of 2.24, MSFT is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
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.
With a decent Debt to FCF ratio value of 1.16, MSFT is doing good in the industry, outperforming 78.79% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that MSFT is not too dependend on debt financing.
MSFT's Debt to Equity ratio of 0.24 is in line compared to the rest of the industry. MSFT outperforms 57.58% of 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.
MSFT has a Quick Ratio of 1.34. This is a normal value and indicates that MSFT is financially healthy and should not expect problems in meeting its short term obligations.
MSFT has a Quick ratio of 1.34. This is comparable 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
The Earnings Per Share has grown by an nice 12.30% over the past year.
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.
Measured over the past years, MSFT shows a quite strong growth in Revenue. The Revenue has been growing by 14.26% on average per year.
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
Based on estimates for the next years, MSFT will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.82% on average per year.
Based on estimates for the next years, MSFT will show a quite strong growth in Revenue. The Revenue will grow by 13.95% on average per year.
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
MSFT is valuated cheaply with a Price/Earnings ratio of 2.02.
98.48% of the companies in the same industry are more expensive than MSFT, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of MSFT to the average of the S&P500 Index (26.06), we can say MSFT is valued rather cheaply.
MSFT is valuated cheaply with a Price/Forward Earnings ratio of 1.64.
Based on the Price/Forward Earnings ratio, MSFT is valued cheaper than 96.97% of the companies in the same industry.
MSFT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 32.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 2.02 | ||
| Fwd PE | 1.64 |
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.
Based on the Price/Free Cash Flow ratio, MSFT is valued cheaply inside the industry as 96.97% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.66 | ||
| EV/EBITDA | 0.77 |
4.3 Compensation for Growth
MSFT's 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.
A more expensive valuation may be justified as MSFT's earnings are expected to grow with 14.77% in the coming years.
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.
MSFT's Dividend Yield is rather good when compared to the industry average which is at 1.51. MSFT pays more dividend than 92.42% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, 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
24.68% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
The dividend of MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.68%
EPS Next 2Y13.6%
EPS Next 3Y14.77%
TSX:MSFT (11/7/2025, 7:00:00 PM)
35.54
+5.24 (+17.29%)
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 Cap264.20B
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-Date
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 | 2.02 | ||
| Fwd PE | 1.64 | ||
| P/S | 0.71 | ||
| P/FCF | 2.66 | ||
| P/OCF | 1.48 | ||
| P/B | 0.61 | ||
| P/tB | 1.18 | ||
| EV/EBITDA | 0.77 |
EPS(TTM)17.63
EY49.61%
EPS(NY)21.64
Fwd EY60.88%
FCF(TTM)13.37
FCFY37.63%
OCF(TTM)23.98
OCFY67.48%
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.
What is the valuation status for MSFT stock?
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 are the PE and PB ratios of MICROSOFT CORP-CDR (MSFT.CA) stock?
The Price/Earnings (PE) ratio for MICROSOFT CORP-CDR (MSFT.CA) is 2.02 and the Price/Book (PB) ratio is 0.61.
What is the earnings growth outlook for MICROSOFT CORP-CDR?
The Earnings per Share (EPS) of MICROSOFT CORP-CDR (MSFT.CA) is expected to grow by 13.17% in the next year.