Microsoft Corporation
Exchange: NASDAQSector: TechnologyIndustry: Software - Infrastructure
Microsoft (Nasdaq "MSFT") creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of customers. The company is committed to making AI broadly available and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more. SOURCE Microsoft Corp.
Current Price
$421.06
+0.87%GoodMoat Value
$591.63
40.5% undervaluedProfile
Valuation (TTM)
Market Cap$3.13T
P/E24.97
EV$2.81T
P/B9.10
Shares Out7.43B
P/Sales9.82
Revenue$318.27B
EV/EBITDA15.45
Microsoft Corporation (MSFT) Stock Analysis
GoodMoat Analysis
Microsoft exhibits a very strong and durable competitive moat, scoring high on multiple criteria, and demonstrates exceptional financial quality. However, its current valuation appears full, trading at a significant premium to its estimated fair value according to the GoodMoat framework.
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Microsoft is a technology behemoth with three core segments: Productivity & Business Processes (Office, LinkedIn), Intelligent Cloud (Azure, server products), and More Personal Computing (Windows, Xbox, devices). It operates a dominant software ecosystem. The company's moat is exceptionally wide, likely scoring very high on the framework's 14-point scale. Key advantages include powerful network effects (LinkedIn, Office/Teams ecosystem), extremely high switching costs for enterprise software, proprietary data at scale, strategic partnerships, and deep technology leadership in cloud and AI. Financially, it is a high-quality compounder, with an operating margin of 45.6%, an ROE of 34.7%, and consistent double-digit revenue growth of 16.7% YoY. The balance sheet is strong with low debt. According to the GoodMoat Decision Framework, the business easily passes the Moat & Quality Gate. The primary consideration is valuation. The provided GoodMoat Target of $591.63 suggests a significant margin of safety. However, at the current price of $372.72, the stock trades at a P/E of 23.1x. While reasonable for its growth, this is not a deep discount. A value investor would need to scrutinize the DCF assumptions behind the target price and determine if the current market price offers an adequate margin of safety, as the stock appears fairly valued to slightly rich on traditional metrics like its 2.6% FCF yield. The analysis suggests a high-quality business priced for perfection, warranting a 'with caution' stance from a strict value perspective pending a more attractive entry point. Analysis based on data as of 2024-05-15.
Market Cap$3.13T
Current Price$421.06
P/E Ratio24.97
Forward P/E—
PEG Ratio1.07
EPS$13.64
Book Value$46.26
P/B Ratio9.10
MSFT Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 11.0% FCF growth (CAGR)
Cash vs Debt
Net Debt: 30.3B
Revenue
125.8B
FY19
143.0B
FY20
168.1B
FY21
198.3B
FY22
211.9B
FY23
245.1B
FY24
281.7B
FY25
Net Income
39.2B
FY19
44.3B
FY20
61.3B
FY21
72.7B
FY22
72.4B
FY23
88.1B
FY24
101.8B
FY25
MSFT 52-Week Range
$356.77
$539.81
50-Day MA: $399.82200-Day MA: $460.30
Did you know?
Free cash flow has been growing at 11.0% annually.
Microsoft Corporation (MSFT) Financial Summary
Microsoft Corporation (MSFT) is a Technology company in the Software - Infrastructure industry, listed on NASDAQ. The stock currently trades at $421.06 with a market capitalization of $3.13T.
Key valuation metrics include a P/E ratio of 24.97, price-to-book ratio of 9.10, and EPS of $13.64. The company reports a profit margin of 39.3% and return on equity of 36.5%.
MSFT Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $3.13T |
| P/E Ratio | 24.97 |
| EPS | $13.64 |
| P/B Ratio | 9.10 |
| P/S Ratio | 9.82 |
| EV/EBITDA | 15.45 |
| Dividend Yield | 0.77% |
| Profit Margin | 39.3% |
| Return on Equity | 36.5% |
| Debt/Equity | 0.18 |
MSFT Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $125.84B | $39.24B |
| FY20 | $143.01B | $44.28B |
| FY21 | $168.09B | $61.27B |
| FY22 | $198.27B | $72.74B |
| FY23 | $211.91B | $72.36B |
| FY24 | $245.12B | $88.14B |
| FY25 | $281.72B | $101.83B |
Microsoft Corporation (MSFT) Valuation
Based on GoodMoat's DCF model, Microsoft Corporation has a fair value estimate of $591.63. At the current price of $421.06, the stock appears 28.8% undervalued relative to our intrinsic value estimate.
MSFT Quality Indicators
Microsoft Corporation maintains a profit margin of 39.3% and an operating margin of 45.6%. Return on equity stands at 36.5%. The current ratio is 1.35. Debt-to-equity ratio is 0.18.
About Microsoft Corporation
Microsoft (Nasdaq "MSFT") creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of customers. The company is committed to making AI broadly available and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more. SOURCE Microsoft Corp.
MSFT Free Cash Flow
Microsoft Corporation generated $71.61B in trailing twelve-month free cash flow, representing an FCF yield of 2.29%. This moderate FCF yield indicates reasonable cash generation.
MSFT Shares Outstanding
Microsoft Corporation has 7.43 billion shares outstanding at a share price of $421.06, giving it a market capitalization of $3.13T.
MSFT Recent Insider Trades
Recent insider transactions at Microsoft Corporation include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Coleman Amy (EVP, Chief Human Resources Off) | SELL | 1,262.31 | $519241.94 |
| Hogan Kathleen T (EVP, Strategy) | SELL | 12,320.87 | $5.05M |
| STANTON JOHN W | BUY | 5,000 | $1.99M |