404.37 USD
-8.9 (-2.15%)
At close: Feb 11, 2026
404.62 USD
+0.25 (+0.06%)
After Hours: 2/11/2026, 8:00:01 PM
We assign a fundamental rating of 7 out of 10 to MSFT. MSFT was compared to 277 industry peers in the Software industry. MSFT has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. MSFT is not overvalued while it is showing excellent growth. This is an interesting combination. MSFT also has an excellent dividend rating. This makes MSFT very considerable for dividend and growth and quality investing!
1. Profitability
1.1 Basic Checks
- In the past year MSFT was profitable.
- MSFT had a positive operating cash flow in the past year.
- 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
- Looking at the Return On Assets, with a value of 17.93%, MSFT belongs to the top of the industry, outperforming 93.86% of the companies in the same industry.
- MSFT has a Return On Equity of 30.51%. This is amongst the best in the industry. MSFT outperforms 92.42% of its industry peers.
- MSFT has a Return On Invested Capital of 21.86%. This is amongst the best in the industry. MSFT outperforms 94.58% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for MSFT is significantly above the industry average of 10.80%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.93% | ||
| ROE | 30.51% | ||
| ROIC | 21.86% |
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
- MSFT's Profit Margin of 39.04% is amongst the best of the industry. MSFT outperforms 92.42% of its industry peers.
- In the last couple of years the Profit Margin of MSFT has grown nicely.
- MSFT has a Operating Margin of 46.67%. This is amongst the best in the industry. MSFT outperforms 96.75% of its industry peers.
- MSFT's Operating Margin has improved in the last couple of years.
- With a Gross Margin value of 68.59%, MSFT perfoms like the industry average, outperforming 50.18% 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 | 46.67% | ||
| PM (TTM) | 39.04% | ||
| GM | 68.59% |
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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSFT is creating value.
- Compared to 1 year ago, MSFT has about the same amount of shares outstanding.
- MSFT has less shares outstanding than it did 5 years ago.
- MSFT has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 8.56 indicates that MSFT is not in any danger for bankruptcy at the moment.
- The Altman-Z score of MSFT (8.56) is better than 89.17% of its industry peers.
- The Debt to FCF ratio of MSFT is 1.30, which is an excellent value as it means it would take MSFT, only 1.30 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 1.30, MSFT is doing good in the industry, outperforming 71.84% of the companies in the same industry.
- A Debt/Equity ratio of 0.23 indicates that MSFT is not too dependend on debt financing.
- With a Debt to Equity ratio value of 0.23, MSFT perfoms like the industry average, outperforming 42.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.3 | ||
| Altman-Z | 8.56 |
ROIC/WACC1.99
WACC10.99%
2.3 Liquidity
- MSFT has a Current Ratio of 1.39. 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 (1.39) is comparable to the rest of the industry.
- MSFT has a Quick Ratio of 1.38. This is a normal value and indicates that MSFT is financially healthy and should not expect problems in meeting its short term obligations.
- With a Quick ratio value of 1.38, MSFT perfoms like the industry average, outperforming 42.60% of the companies in the same industry.
- MSFT 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 | 1.39 | ||
| Quick Ratio | 1.38 |
3. Growth
3.1 Past
- MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.83%, which is quite impressive.
- Measured over the past years, MSFT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.86% on average per year.
- The Revenue has grown by 16.67% in the past year. This is quite good.
- The Revenue has been growing by 14.52% on average over the past years. This is quite good.
EPS 1Y (TTM)23.83%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%28.17%
Revenue 1Y (TTM)16.67%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%16.72%
3.2 Future
- The Earnings Per Share is expected to grow by 18.83% on average over the next years. This is quite good.
- Based on estimates for the next years, MSFT will show a quite strong growth in Revenue. The Revenue will grow by 15.04% on average per year.
EPS Next Y24.51%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
EPS Next 5Y18.83%
Revenue Next Year17.53%
Revenue Next 2Y16.55%
Revenue Next 3Y16.52%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 26.29, the valuation of MSFT can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of MSFT indicates a somewhat cheap valuation: MSFT is cheaper than 61.01% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of MSFT to the average of the S&P500 Index (28.23), we can say MSFT is valued inline with the index average.
- With a Price/Forward Earnings ratio of 20.81, MSFT is valued on the expensive side.
- MSFT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MSFT is cheaper than 64.98% of the companies in the same industry.
- MSFT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 28.01, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.29 | ||
| Fwd PE | 20.81 |
4.2 Price Multiples
- 77.62% of the companies in the same industry are more expensive than MSFT, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MSFT is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.82 | ||
| EV/EBITDA | 16.78 |
4.3 Compensation for Growth
- MSFT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 18.79% in the coming years.
PEG (NY)1.07
PEG (5Y)1.39
EPS Next 2Y19.37%
EPS Next 3Y18.79%
5. Dividend
5.1 Amount
- MSFT has a yearly dividend return of 0.92%, which is pretty low.
- The stock price of MSFT dropped by -20.74% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- Compared to an average industry Dividend Yield of 0.61, MSFT pays a better dividend. On top of this MSFT pays more dividend than 90.97% of the companies listed in the same industry.
- With a Dividend Yield of 0.92, MSFT pays less dividend than the S&P500 average, which is at 1.79.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
5.2 History
- The dividend of MSFT is nicely growing with an annual growth rate of 10.24%!
- MSFT has been paying a dividend for at least 10 years, so it has a reliable track record.
- MSFT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.24%
Div Incr Years20
Div Non Decr Years20
5.3 Sustainability
- MSFT pays out 21.19% of its income as dividend. This is a sustainable payout ratio.
- The dividend of MSFT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP21.19%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
404.37
-8.9 (-2.15%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)01-28 2026-01-28/amc
Earnings (Next)04-28 2026-04-28/amc
Inst Owners75.56%
Inst Owner Change-2.3%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap3.01T
Revenue(TTM)305.45B
Net Income(TTM)119.26B
Analysts85.97
Price Target612.29 (51.42%)
Short Float %0.74%
Short Ratio1.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.92% |
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP21.19%
Div Incr Years20
Div Non Decr Years20
Ex-Date02-19 2026-02-19 (0.91)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.37%
Min EPS beat(2)2.28%
Max EPS beat(2)10.46%
EPS beat(4)4
Avg EPS beat(4)6.07%
Min EPS beat(4)2.28%
Max EPS beat(4)10.46%
EPS beat(8)7
Avg EPS beat(8)3.92%
EPS beat(12)11
Avg EPS beat(12)4.68%
EPS beat(16)12
Avg EPS beat(16)3.14%
Revenue beat(2)1
Avg Revenue beat(2)0.18%
Min Revenue beat(2)-0.73%
Max Revenue beat(2)1.09%
Revenue beat(4)3
Avg Revenue beat(4)0.57%
Min Revenue beat(4)-0.73%
Max Revenue beat(4)1.54%
Revenue beat(8)3
Avg Revenue beat(8)-0.06%
Revenue beat(12)5
Avg Revenue beat(12)0.13%
Revenue beat(16)5
Avg Revenue beat(16)-0.38%
PT rev (1m)-3.34%
PT rev (3m)-1.96%
EPS NQ rev (1m)1.24%
EPS NQ rev (3m)5.33%
EPS NY rev (1m)1.52%
EPS NY rev (3m)7.47%
Revenue NQ rev (1m)0.24%
Revenue NQ rev (3m)0.94%
Revenue NY rev (1m)0.43%
Revenue NY rev (3m)1.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.29 | ||
| Fwd PE | 20.81 | ||
| P/S | 9.84 | ||
| P/FCF | 38.82 | ||
| P/OCF | 18.72 | ||
| P/B | 7.69 | ||
| P/tB | 11.98 | ||
| EV/EBITDA | 16.78 |
EPS(TTM)15.38
EY3.8%
EPS(NY)19.44
Fwd EY4.81%
FCF(TTM)10.42
FCFY2.58%
OCF(TTM)21.6
OCFY5.34%
SpS41.1
BVpS52.59
TBVpS33.77
PEG (NY)1.07
PEG (5Y)1.39
Graham Number134.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.93% | ||
| ROE | 30.51% | ||
| ROCE | 26.63% | ||
| ROIC | 21.86% | ||
| ROICexc | 26.24% | ||
| ROICexgc | 38.24% | ||
| OM | 46.67% | ||
| PM (TTM) | 39.04% | ||
| GM | 68.59% | ||
| FCFM | 25.34% |
ROA(3y)17.07%
ROA(5y)17.9%
ROE(3y)32.52%
ROE(5y)36.88%
ROIC(3y)22.94%
ROIC(5y)23.52%
ROICexc(3y)31.07%
ROICexc(5y)36.94%
ROICexgc(3y)52.63%
ROICexgc(5y)67.5%
ROCE(3y)28.11%
ROCE(5y)28.75%
ROICexgc growth 3Y-18.02%
ROICexgc growth 5Y-15.78%
ROICexc growth 3Y-12.77%
ROICexc growth 5Y-10.15%
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%
F-Score6
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.3 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 222.84% | ||
| Cap/Sales | 27.2% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 89.25% | ||
| Profit Quality | 64.91% | ||
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.38 | ||
| Altman-Z | 8.56 |
F-Score6
WACC10.99%
ROIC/WACC1.99
Cap/Depr(3y)197.12%
Cap/Depr(5y)186.6%
Cap/Sales(3y)18.11%
Cap/Sales(5y)15.73%
Profit Quality(3y)78.85%
Profit Quality(5y)83.54%
High Growth Momentum
Growth
EPS 1Y (TTM)23.83%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%28.17%
EPS Next Y24.51%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
EPS Next 5Y18.83%
Revenue 1Y (TTM)16.67%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%16.72%
Revenue Next Year17.53%
Revenue Next 2Y16.55%
Revenue Next 3Y16.52%
Revenue Next 5Y15.04%
EBIT growth 1Y21.11%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year57.72%
EBIT Next 3Y28.9%
EBIT Next 5Y23.22%
FCF growth 1Y14.78%
FCF growth 3Y3.2%
FCF growth 5Y9.62%
OCF growth 1Y56.37%
OCF growth 3Y15.21%
OCF growth 5Y17.55%
MICROSOFT CORP / MSFT FAQ
Can you provide the ChartMill fundamental rating for MICROSOFT CORP?
ChartMill assigns a fundamental rating of 7 / 10 to MSFT.
Can you provide the valuation status for MICROSOFT CORP?
ChartMill assigns a valuation rating of 5 / 10 to MICROSOFT CORP (MSFT). This can be considered as Fairly Valued.
Can you provide the profitability details for MICROSOFT CORP?
MICROSOFT CORP (MSFT) has a profitability rating of 8 / 10.
What is the financial health of MICROSOFT CORP (MSFT) stock?
The financial health rating of MICROSOFT CORP (MSFT) is 8 / 10.
What is the expected EPS growth for MICROSOFT CORP (MSFT) stock?
The Earnings per Share (EPS) of MICROSOFT CORP (MSFT) is expected to grow by 24.51% in the next year.