Microsoft Corporation
Microsoft Corporation Fundamental Analysis
Microsoft Corporation (MSFT.NE) shows strong financial fundamentals with a PE ratio of 22.07, profit margin of 39.04%, and ROE of 33.61%. The company generates $323.7B in annual revenue with strong year-over-year growth of 15.67%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 77.0/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze MSFT.NE's fundamental strength across five key dimensions:
Efficiency Score
ExcellentMSFT.NE demonstrates superior asset utilization.
Valuation Score
ExcellentMSFT.NE trades at attractive valuation levels.
Growth Score
ExcellentMSFT.NE delivers strong and consistent growth momentum.
Financial Health Score
ExcellentMSFT.NE maintains a strong and stable balance sheet.
Profitability Score
ExcellentMSFT.NE achieves industry-leading margins.
Key Financial Metrics
Is MSFT.NE Expensive or Cheap?
P/E Ratio
MSFT.NE trades at 22.07 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MSFT.NE's PEG of -1.47 indicates potential undervaluation.
Price to Book
The market values Microsoft Corporation at 6.73 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.40 times EBITDA. This signals the market has high growth expectations.
How Well Does MSFT.NE Make Money?
Net Profit Margin
For every $100 in sales, Microsoft Corporation keeps $39.04 as profit after all expenses.
Operating Margin
Core operations generate 46.67 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $33.61 in profit for every $100 of shareholder equity.
ROA
Microsoft Corporation generates $17.93 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Microsoft Corporation generates strong operating cash flow of $170.08B, reflecting robust business health.
Free Cash Flow
Microsoft Corporation generates strong free cash flow of $82.03B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.56 in free cash annually.
FCF Yield
MSFT.NE converts 2.78% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.07
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.47
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.73
vs 25 benchmark
P/S Ratio
Price to sales ratio
9.13
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.15
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.39
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.34
vs 25 benchmark
ROA
Return on assets percentage
0.18
vs 25 benchmark
ROCE
Return on capital employed
0.27
vs 25 benchmark
How MSFT.NE Stacks Against Its Sector Peers
| Metric | MSFT.NE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.07 | 33.94 | Better (Cheaper) |
| ROE | 33.61% | 1002.00% | Weak |
| Net Margin | 39.04% | -48794.00% (disorted) | Strong |
| Debt/Equity | 0.15 | 0.44 | Strong (Low Leverage) |
| Current Ratio | 1.39 | 5.74 | Neutral |
| ROA | 17.93% | -288341.00% (disorted) | Strong |
MSFT.NE outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Microsoft Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
101.13%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
131.92%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
134.57%
Industry Style: Growth, Innovation, High Beta
High Growth