MICROSOFT CORP-CDR (MSFT.CA) Stock Fundamental Analysis
Canada - TSX:MSFT - CA59516M1041
37.56 CAD
+7.26 (+23.96%)
Taking everything into account, MSFT scores 7 out of 10 in our fundamental rating. MSFT was compared to 63 industry peers in the Software industry. MSFT has an excellent profitability rating, but there are some minor concerns on its financial health. MSFT is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings would make MSFT suitable for value investing!
1. Profitability
1.1 Basic Checks
MSFT had positive earnings in the past year.
MSFT had a positive operating cash flow in the past year.
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
MSFT has a better Return On Assets (17.37%) than 93.94% of its industry peers.
MSFT has a better Return On Equity (30.64%) than 93.94% of its industry peers.
MSFT's Return On Invested Capital of 22.54% is amongst the best of the industry. MSFT outperforms 92.42% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MSFT is significantly above the industry average of 12.35%.
| 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 has a Profit Margin of 35.43%. This is amongst the best in the industry. MSFT outperforms 95.45% of its industry peers.
In the last couple of years the Profit Margin of MSFT has grown nicely.
MSFT has a Operating Margin of 44.96%. This is amongst the best in the industry. MSFT outperforms 98.48% of its industry peers.
MSFT's Operating Margin has improved in the last couple of years.
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.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSFT is creating value.
MSFT has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, MSFT has less shares outstanding
Compared to 1 year ago, MSFT has an improved debt to assets ratio.
2.2 Solvency
MSFT has an Altman-Z score of 2.24. This is not the best score and indicates that MSFT is in the grey zone with still only limited risk for bankruptcy at the moment.
MSFT's Altman-Z score of 2.24 is fine compared to the rest of the industry. MSFT outperforms 63.64% of its industry peers.
The Debt to FCF ratio of MSFT is 1.16, which is an excellent value as it means it would take MSFT, only 1.16 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.16, MSFT is in the better half of 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 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
MSFT has a Current Ratio of 1.35. This is a normal value and indicates that MSFT is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of MSFT (1.35) 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.
Looking at the Quick ratio, with a value of 1.34, MSFT is in line with its industry, outperforming 57.58% of the companies in the same industry.
| 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.
MSFT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.98% yearly.
Looking at the last year, MSFT shows a quite strong growth in Revenue. The Revenue has grown by 15.04% in the last year.
MSFT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.26% yearly.
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.
The Revenue is expected to grow by 13.95% on average over the next years. This is quite good.
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 2.13.
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 (26.89), we can say MSFT is valued rather cheaply.
A Price/Forward Earnings ratio of 1.74 indicates a rather cheap valuation of MSFT.
96.97% of the companies in the same industry are more expensive than MSFT, based on the Price/Forward Earnings ratio.
MSFT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.99.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 2.13 | ||
| Fwd PE | 1.74 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MSFT is valued cheaper than 98.48% of the companies in the same industry.
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 | 2.81 | ||
| 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.
MSFT's earnings are expected to grow with 14.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.16
PEG (5Y)0.11
EPS Next 2Y13.6%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
MSFT has a yearly dividend return of 0.80%, which is pretty low.
MSFT's Dividend Yield is rather good when compared to the industry average which is at 1.58. MSFT pays more dividend than 92.42% of the companies in the same industry.
With a Dividend Yield of 0.80, MSFT pays less dividend than the S&P500 average, which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
On average, the dividend of MSFT grows each year by 10.19%, which is quite nice.
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 (10/24/2025, 7:00:00 PM)
37.56
+7.26 (+23.96%)
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 Cap279.22B
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 | 2.13 | ||
| Fwd PE | 1.74 | ||
| P/S | 0.75 | ||
| P/FCF | 2.81 | ||
| P/OCF | 1.57 | ||
| P/B | 0.65 | ||
| P/tB | 1.24 | ||
| EV/EBITDA | 0.77 |
EPS(TTM)17.63
EY46.94%
EPS(NY)21.64
Fwd EY57.6%
FCF(TTM)13.37
FCFY35.6%
OCF(TTM)23.98
OCFY63.85%
SpS49.99
BVpS57.8
TBVpS30.19
PEG (NY)0.16
PEG (5Y)0.11
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 2.13 and the Price/Book (PB) ratio is 0.65.
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.