MICROSOFT CORP (MSFT) Stock Fundamental Analysis

NASDAQ:MSFT • US5949181045

401.32 USD
-0.52 (-0.13%)
At close: Feb 13, 2026
400.15 USD
-1.17 (-0.29%)
After Hours: 2/13/2026, 8:27:04 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to MSFT. MSFT was compared to 277 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 is not priced too expensively while it is growing strongly. Keep and eye on this one! MSFT also has an excellent dividend rating. These ratings would make MSFT suitable for dividend and growth and quality investing!


Dividend Valuation Growth Profitability Health

8

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.
  • Each year in the past 5 years MSFT has been profitable.
  • MSFT had a positive operating cash flow in each of the past 5 years.
MSFT Yearly Net Income VS EBIT VS OCF VS FCFMSFT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B 100B

1.2 Ratios

  • MSFT has a better Return On Assets (17.93%) than 93.86% of its industry peers.
  • The Return On Equity of MSFT (30.51%) is better than 92.42% of its industry peers.
  • MSFT's Return On Invested Capital of 21.86% is amongst the best of the industry. MSFT outperforms 94.58% of its industry peers.
  • MSFT had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 10.83%.
Industry RankSector 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%
MSFT Yearly ROA, ROE, ROICMSFT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

1.3 Margins

  • Looking at the Profit Margin, with a value of 39.04%, MSFT belongs to the top of the industry, outperforming 92.42% of the companies in the same industry.
  • In the last couple of years the Profit Margin of MSFT has grown nicely.
  • Looking at the Operating Margin, with a value of 46.67%, MSFT belongs to the top of the industry, outperforming 96.75% of the companies in the same industry.
  • In the last couple of years the Operating Margin of MSFT has grown nicely.
  • MSFT's Gross Margin of 68.59% is in line compared to the rest of the industry. MSFT outperforms 50.18% of its industry peers.
  • In the last couple of years the Gross Margin of MSFT has remained more or less at the same level.
Industry RankSector 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%
MSFT Yearly Profit, Operating, Gross MarginsMSFT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60

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ROAROEROICOperating and Profit MarginShow most profitable peers

8

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.
  • Compared to 1 year ago, MSFT has about the same amount of shares outstanding.
  • Compared to 5 years ago, MSFT has less shares outstanding
  • MSFT has a better debt/assets ratio than last year.
MSFT Yearly Shares OutstandingMSFT Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B
MSFT Yearly Total Debt VS Total AssetsMSFT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200B 400B 600B

2.2 Solvency

  • MSFT has an Altman-Z score of 8.38. This indicates that MSFT is financially healthy and has little risk of bankruptcy at the moment.
  • The Altman-Z score of MSFT (8.38) is better than 89.17% of its industry peers.
  • MSFT has a debt to FCF ratio of 1.30. This is a very positive value and a sign of high solvency as it would only need 1.30 years to pay back of all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 1.30, MSFT is in the better half of the industry, outperforming 71.84% of the companies in the same industry.
  • MSFT has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
  • 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 RankSector Rank
Debt/Equity 0.23
Debt/FCF 1.3
Altman-Z 8.38
ROIC/WACC2.02
WACC10.84%
MSFT Yearly LT Debt VS Equity VS FCFMSFT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100B 200B 300B

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.
  • MSFT has a Current ratio of 1.39. This is comparable to the rest of the industry: MSFT outperforms 42.60% of its industry peers.
  • A Quick Ratio of 1.38 indicates that MSFT should not have too much problems paying its short term obligations.
  • MSFT has a Quick ratio (1.38) which is comparable to the rest of the 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 RankSector Rank
Current Ratio 1.39
Quick Ratio 1.38
MSFT Yearly Current Assets VS Current LiabilitesMSFT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50B 100B 150B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

7

3. Growth

3.1 Past

  • The Earnings Per Share has grown by an impressive 23.83% over the past year.
  • 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.
  • MSFT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.67%.
  • 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.
  • The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
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

  • The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
MSFT Yearly Revenue VS EstimatesMSFT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 200B 400B 600B
MSFT Yearly EPS VS EstimatesMSFT Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 10 20 30 40

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Find the best growth stocksShow best growing peers

5

4. Valuation

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 26.09, MSFT can be considered very expensive at the moment.
  • Compared to the rest of the industry, the Price/Earnings ratio of MSFT indicates a somewhat cheap valuation: MSFT is cheaper than 60.65% of the companies listed in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 27.97, MSFT is valued at the same level.
  • With a Price/Forward Earnings ratio of 20.65, MSFT is valued on the expensive side.
  • Based on the Price/Forward Earnings ratio, MSFT is valued a bit cheaper than 63.54% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 27.96, MSFT is valued a bit cheaper.
Industry RankSector Rank
PE 26.09
Fwd PE 20.65
MSFT Price Earnings VS Forward Price EarningsMSFT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, MSFT is valued a bit cheaper than 76.53% of the companies in the same industry.
  • 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 RankSector Rank
P/FCF 38.53
EV/EBITDA 16.31
MSFT Per share dataMSFT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

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 18.79% in the coming years.
PEG (NY)1.06
PEG (5Y)1.38
EPS Next 2Y19.37%
EPS Next 3Y18.79%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. Dividend

5.1 Amount

  • MSFT has a yearly dividend return of 0.91%, which is pretty low.
  • The stock price of MSFT dropped by -21.34% 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.
  • MSFT's Dividend Yield is rather good when compared to the industry average which is at 0.60. MSFT pays more dividend than 90.97% of the companies in the same industry.
  • With a Dividend Yield of 0.91, MSFT pays less dividend than the S&P500 average, which is at 1.84.
Industry RankSector Rank
Dividend Yield 0.91%

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
MSFT Yearly Dividends per shareMSFT Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3

5.3 Sustainability

  • 21.19% 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.
DP21.19%
EPS Next 2Y19.37%
EPS Next 3Y18.79%
MSFT Yearly Income VS Free CF VS DividendMSFT Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B 100B
MSFT Dividend Payout.MSFT Dividend Payout, showing the Payout Ratio.MSFT Dividend Payout.PayoutRetained Earnings

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Find the best dividend stocksShow peers with best dividend

MICROSOFT CORP

NASDAQ:MSFT (2/13/2026, 8:27:04 PM)

After market: 400.15 -1.17 (-0.29%)

401.32

-0.52 (-0.13%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)01-28
Earnings (Next)04-28
Inst Owners75.56%
Inst Owner Change-2.3%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap2.98T
Revenue(TTM)305.45B
Net Income(TTM)119.26B
Analysts86.36
Price Target612.29 (52.57%)
Short Float %0.74%
Short Ratio1.94
Dividend
Industry RankSector Rank
Dividend Yield 0.91%
Yearly Dividend3.24
Dividend Growth(5Y)10.24%
DP21.19%
Div Incr Years20
Div Non Decr Years20
Ex-Date02-19
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 RankSector Rank
PE 26.09
Fwd PE 20.65
P/S 9.77
P/FCF 38.53
P/OCF 18.58
P/B 7.63
P/tB 11.89
EV/EBITDA 16.31
EPS(TTM)15.38
EY3.83%
EPS(NY)19.44
Fwd EY4.84%
FCF(TTM)10.42
FCFY2.6%
OCF(TTM)21.6
OCFY5.38%
SpS41.1
BVpS52.59
TBVpS33.77
PEG (NY)1.06
PEG (5Y)1.38
Graham Number134.9
Profitability
Industry RankSector 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 RankSector 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 8.38
F-Score6
WACC10.84%
ROIC/WACC2.02
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.