472.12 USD
-6.31 (-1.32%)
473.5 USD
+1.38 (+0.29%)
Taking everything into account, MSFT scores 7 out of 10 in our fundamental rating. MSFT was compared to 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 decent growth rate and is not valued too expensively. MSFT also has an excellent dividend rating. This makes MSFT very considerable 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.
In the past 5 years MSFT always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 16.49%, MSFT belongs to the top of the industry, outperforming 91.81% of the companies in the same industry.
Looking at the Return On Equity, with a value of 28.90%, MSFT belongs to the top of the industry, outperforming 91.81% of the companies in the same industry.
With an excellent Return On Invested Capital value of 22.25%, MSFT belongs to the best of the industry, outperforming 94.66% of the companies in the same industry.
MSFT had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 11.96%.
| 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
The Profit Margin of MSFT (35.71%) is better than 92.53% 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 46.27%, MSFT belongs to the top of the industry, outperforming 96.80% of the companies in the same industry.
MSFT's Operating Margin has improved in the last couple of years.
MSFT has a Gross Margin of 68.76%. This is comparable to the rest of the industry: MSFT outperforms 49.82% of its industry peers.
MSFT's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSFT is creating value.
Compared to 1 year ago, MSFT has about the same amount of shares outstanding.
The number of shares outstanding for MSFT has been reduced compared to 5 years ago.
MSFT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 9.53 indicates that MSFT is not in any danger for bankruptcy at the moment.
MSFT has a Altman-Z score of 9.53. This is amongst the best in the industry. MSFT outperforms 87.90% of its industry peers.
The Debt to FCF ratio of MSFT is 1.25, which is an excellent value as it means it would take MSFT, only 1.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MSFT (1.25) is better than 73.67% of its industry peers.
MSFT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
MSFT has a Debt to Equity ratio (0.24) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.25 | ||
| Altman-Z | 9.53 |
ROIC/WACC2.04
WACC10.9%
2.3 Liquidity
MSFT has a Current Ratio of 1.40. 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 1.40. This is comparable to the rest of the industry: MSFT outperforms 43.77% of its industry peers.
A Quick Ratio of 1.39 indicates that MSFT should not have too much problems paying its short term obligations.
MSFT has a Quick ratio of 1.39. This is comparable to the rest of the industry: MSFT outperforms 44.13% of its industry peers.
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.
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 15.59%.
The Revenue has been growing by 14.52% on average over the past years. This is quite good.
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
MSFT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.83% yearly.
The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
EPS Next Y16.96%
EPS Next 2Y17.68%
EPS Next 3Y18.52%
EPS Next 5Y18.83%
Revenue Next Year16.4%
Revenue Next 2Y15.53%
Revenue Next 3Y15.94%
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.
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
Based on the Price/Earnings ratio of 32.63, the valuation of MSFT can be described as expensive.
MSFT's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 25.47. MSFT is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 24.99, which indicates a rather expensive current valuation of MSFT.
MSFT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MSFT is cheaper than 65.48% of the companies in the same industry.
MSFT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.63 | ||
| Fwd PE | 24.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MSFT is valued a bit cheaper than the industry average as 77.94% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, MSFT is valued a bit cheaper than the industry average as 61.21% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.98 | ||
| EV/EBITDA | 19.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MSFT does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of MSFT may justify a higher PE ratio.
MSFT's earnings are expected to grow with 18.52% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.92
PEG (5Y)1.73
EPS Next 2Y17.68%
EPS Next 3Y18.52%
5. Dividend
5.1 Amount
With a yearly dividend of 0.76%, MSFT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 51.78, MSFT pays a better dividend. On top of this MSFT pays more dividend than 90.39% of the companies listed in the same industry.
With a Dividend Yield of 0.76, MSFT pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.76% |
5.2 History
On average, the dividend of MSFT grows each year by 10.24%, which is quite nice.
MSFT has paid a dividend for at least 10 years, which is 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 23.52% 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.
DP23.52%
EPS Next 2Y17.68%
EPS Next 3Y18.52%
472.12
-6.31 (-1.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.31%
Inst Owner Change1.52%
Ins Owners0.03%
Ins Owner Change0.03%
Market Cap3.51T
Revenue(TTM)293.81B
Net Income(TTM)104.91B
Analysts86.29
Price Target634.71 (34.44%)
Short Float %0.71%
Short Ratio2.49
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)2.68%
PT rev (3m)4.96%
EPS NQ rev (1m)4.33%
EPS NQ rev (3m)4.44%
EPS NY rev (1m)0.96%
EPS NY rev (3m)3.64%
Revenue NQ rev (1m)0.37%
Revenue NQ rev (3m)0.39%
Revenue NY rev (1m)0.81%
Revenue NY rev (3m)2.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.63 | ||
| Fwd PE | 24.99 | ||
| P/S | 11.94 | ||
| P/FCF | 44.98 | ||
| P/OCF | 23.86 | ||
| P/B | 9.66 | ||
| P/tB | 15.78 | ||
| EV/EBITDA | 19.52 |
EPS(TTM)14.47
EY3.06%
EPS(NY)18.89
Fwd EY4%
FCF(TTM)10.5
FCFY2.22%
OCF(TTM)19.78
OCFY4.19%
SpS39.53
BVpS48.85
TBVpS29.92
PEG (NY)1.92
PEG (5Y)1.73
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 | 9.53 |
F-Score6
WACC10.9%
ROIC/WACC2.04
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 Y16.96%
EPS Next 2Y17.68%
EPS Next 3Y18.52%
EPS Next 5Y18.83%
Revenue 1Y (TTM)15.59%
Revenue growth 3Y12.42%
Revenue growth 5Y14.52%
Sales Q2Q%18.43%
Revenue Next Year16.4%
Revenue Next 2Y15.53%
Revenue Next 3Y15.94%
Revenue Next 5Y15.04%
EBIT growth 1Y20.2%
EBIT growth 3Y15.52%
EBIT growth 5Y19.4%
EBIT Next Year51.87%
EBIT Next 3Y30.06%
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 32.63 and the Price/Book (PB) ratio is 9.66.
What is the earnings growth outlook for MICROSOFT CORP?
The Earnings per Share (EPS) of MICROSOFT CORP (MSFT) is expected to grow by 16.96% in the next year.