483.16 USD
+2.32 (+0.48%)
483.44 USD
+0.28 (+0.06%)
Overall MSFT gets a fundamental rating of 7 out of 10. We evaluated MSFT against 280 industry peers in the Software industry. Both the health and profitability get an excellent rating, making MSFT a very profitable company, without any liquidiy or solvency issues. MSFT has a correct valuation and a medium growth rate. Finally MSFT also has an excellent dividend rating. These ratings could make MSFT a good candidate for dividend and quality 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.
Each year in the past 5 years MSFT had a positive operating cash flow.
1.2 Ratios
MSFT has a Return On Assets of 16.49%. This is amongst the best in the industry. MSFT outperforms 92.50% of its industry peers.
MSFT's Return On Equity of 28.90% is amongst the best of the industry. MSFT outperforms 92.14% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.25%, MSFT belongs to the top of the industry, outperforming 95.00% 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 10.97%.
| 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
With an excellent Profit Margin value of 35.71%, MSFT belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
MSFT's Profit Margin has improved in the last couple of years.
MSFT has a better Operating Margin (46.27%) than 96.79% of its industry peers.
MSFT's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 68.76%, MSFT perfoms like the industry average, outperforming 50.71% 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 | 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
MSFT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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
MSFT has a better debt/assets ratio than last year.
2.2 Solvency
MSFT has an Altman-Z score of 9.71. This indicates that MSFT is financially healthy and has little risk of bankruptcy at the moment.
MSFT's Altman-Z score of 9.71 is amongst the best of the industry. MSFT outperforms 86.07% of its industry peers.
MSFT 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.
MSFT has a Debt to FCF ratio of 1.25. This is in the better half of the industry: MSFT outperforms 73.21% of its industry peers.
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 43.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.71 |
ROIC/WACC2.05
WACC10.83%
2.3 Liquidity
A Current Ratio of 1.40 indicates that MSFT should not have too much problems paying its short term obligations.
The Current ratio of MSFT (1.40) is comparable to the rest of the industry.
A Quick Ratio of 1.39 indicates that MSFT should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.39, MSFT is in line with its industry, outperforming 44.29% of the companies in the same industry.
The current and quick ratio evaluation for MSFT is rather negative, while it does have 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
MSFT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.39%, which is quite good.
The Earnings Per Share has been growing by 18.86% on average over the past years. This is quite good.
The Revenue has grown by 15.59% in the past year. This is quite good.
MSFT 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
Based on estimates for the next years, MSFT will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.83% on average per year.
MSFT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.04% yearly.
EPS Next Y22.86%
EPS Next 2Y18.41%
EPS Next 3Y18.25%
EPS Next 5Y18.83%
Revenue Next Year17.05%
Revenue Next 2Y15.88%
Revenue Next 3Y16%
Revenue Next 5Y15.04%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 33.39, the valuation of MSFT can be described as expensive.
Based on the Price/Earnings ratio, MSFT is valued a bit cheaper than 61.07% of the companies in the same industry.
MSFT's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.49.
MSFT is valuated quite expensively with a Price/Forward Earnings ratio of 25.26.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MSFT indicates a somewhat cheap valuation: MSFT is cheaper than 66.07% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.69. MSFT is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.39 | ||
| Fwd PE | 25.26 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MSFT indicates a somewhat cheap valuation: MSFT is cheaper than 78.21% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MSFT indicates a somewhat cheap valuation: MSFT is cheaper than 60.71% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.03 | ||
| EV/EBITDA | 19.99 |
4.3 Compensation for Growth
The 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 18.25% in the coming years.
PEG (NY)1.46
PEG (5Y)1.77
EPS Next 2Y18.41%
EPS Next 3Y18.25%
5. Dividend
5.1 Amount
MSFT has a yearly dividend return of 0.76%, which is pretty low.
Compared to an average industry Dividend Yield of 60.83, MSFT pays a better dividend. On top of this MSFT pays more dividend than 90.71% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, MSFT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
5.2 History
The dividend of MSFT is nicely growing with an annual growth rate of 10.24%!
MSFT has paid a dividend for at least 10 years, which is a reliable track record.
MSFT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.24%
Div Incr Years20
Div Non Decr Years20
5.3 Sustainability
23.52% of the earnings are spent on dividend by MSFT. This is a low number and sustainable payout ratio.
MSFT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.52%
EPS Next 2Y18.41%
EPS Next 3Y18.25%
483.16
+2.32 (+0.48%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners75.51%
Inst Owner Change1.57%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap3.59T
Revenue(TTM)293.81B
Net Income(TTM)104.91B
Analysts86
Price Target634.84 (31.39%)
Short Float %0.65%
Short Ratio2.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP23.52%
Div Incr Years20
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.33%
Min EPS beat(2)6.2%
Max EPS beat(2)10.46%
EPS beat(4)4
Avg EPS beat(4)5.95%
Min EPS beat(4)1.79%
Max EPS beat(4)10.46%
EPS beat(8)7
Avg EPS beat(8)4.04%
EPS beat(12)10
Avg EPS beat(12)4.42%
EPS beat(16)12
Avg EPS beat(16)3.32%
Revenue beat(2)2
Avg Revenue beat(2)1.31%
Min Revenue beat(2)1.09%
Max Revenue beat(2)1.54%
Revenue beat(4)3
Avg Revenue beat(4)0.57%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)1.54%
Revenue beat(8)3
Avg Revenue beat(8)-0.03%
Revenue beat(12)5
Avg Revenue beat(12)-0.01%
Revenue beat(16)5
Avg Revenue beat(16)-0.36%
PT rev (1m)1.66%
PT rev (3m)2.94%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)4.34%
EPS NY rev (1m)5.04%
EPS NY rev (3m)5.96%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)0.38%
Revenue NY rev (1m)0.56%
Revenue NY rev (3m)1.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.39 | ||
| Fwd PE | 25.26 | ||
| P/S | 12.22 | ||
| P/FCF | 46.03 | ||
| P/OCF | 24.42 | ||
| P/B | 9.89 | ||
| P/tB | 16.15 | ||
| EV/EBITDA | 19.99 |
EPS(TTM)14.47
EY2.99%
EPS(NY)19.12
Fwd EY3.96%
FCF(TTM)10.5
FCFY2.17%
OCF(TTM)19.78
OCFY4.09%
SpS39.53
BVpS48.85
TBVpS29.92
PEG (NY)1.46
PEG (5Y)1.77
Graham Number126.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.49% | ||
| ROE | 28.9% | ||
| ROCE | 27.11% | ||
| ROIC | 22.25% | ||
| ROICexc | 27.94% | ||
| ROICexgc | 43.14% | ||
| OM | 46.27% | ||
| PM (TTM) | 35.71% | ||
| GM | 68.76% | ||
| FCFM | 26.55% |
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 | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Debt/EBITDA | 0.49 | ||
| Cap/Depr | 173.29% | ||
| Cap/Sales | 23.49% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 83.66% | ||
| Profit Quality | 74.36% | ||
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 9.71 |
F-Score6
WACC10.83%
ROIC/WACC2.05
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)19.39%
EPS 3Y14.03%
EPS 5Y18.86%
EPS Q2Q%25.15%
EPS Next Y22.86%
EPS Next 2Y18.41%
EPS Next 3Y18.25%
EPS Next 5Y18.83%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.43%
Revenue Next Year17.05%
Revenue Next 2Y15.88%
Revenue Next 3Y16%
Revenue Next 5Y15.04%
EBIT growth 1Y20.2%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year58.69%
EBIT Next 3Y29.61%
EBIT Next 5Y23.22%
FCF growth 1Y23.39%
FCF growth 3Y3.2%
FCF growth 5Y9.62%
OCF growth 1Y54.83%
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.
What is the valuation status for MSFT stock?
ChartMill assigns a valuation rating of 4 / 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 are the PE and PB ratios of MICROSOFT CORP (MSFT) stock?
The Price/Earnings (PE) ratio for MICROSOFT CORP (MSFT) is 33.39 and the Price/Book (PB) ratio is 9.89.
What is the earnings growth outlook for MICROSOFT CORP?
The Earnings per Share (EPS) of MICROSOFT CORP (MSFT) is expected to grow by 22.86% in the next year.