MSFT

Microsoft Corporation

Fundamental data last updated:October 6, 2026

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company profile

SECTOR

Technology

industry

Software - Infrastructure

Exchange

NASDAQ

County of HQ

US

Next Earnings Date

10/28/2026

Business Summary

Microsoft Corporation is a prominent global technology firm that invents, markets, and provides ongoing assistance for a diverse range of software, digital services, computing devices, and comprehensive solutions. Its operations are organized into three primary divisions: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment delivers crucial tools for both enterprises and individual users. This includes the extensive Office suite (comprising Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Microsoft Viva, and Skype for Business), along with popular consumer offerings like Skype, Outlook.com, OneDrive, and LinkedIn. It also features Dynamics 365, a suite of integrated cloud and on-premises business applications tailored for organizations. The Intelligent Cloud division focuses on sophisticated infrastructure and platform services. Here, Microsoft licenses key products such as SQL Server, Windows Servers, Visual Studio, System Center, and associated Client Access Licenses. It also includes GitHub, a leading platform for developer collaboration and code hosting; Nuance, offering advanced AI solutions for healthcare and businesses; and Azure, its expansive cloud computing platform. This segment further encompasses enterprise support, Microsoft consulting services, and Nuance professional services, assisting clients with the development, deployment, and management of Microsoft's server and desktop technologies, alongside offering product training and certification. Finally, the More Personal Computing segment covers a broad spectrum of consumer and commercial computing experiences. It generates revenue through Windows operating system licensing, including agreements with original equipment manufacturers (OEMs), non-volume licensing, and various Windows Commercial offerings (such as volume licensing and cloud services), as well as patent licensing and Windows Internet of Things (IoT). This division also supplies its own hardware, including Surface devices, PC accessories, and gaming/entertainment consoles. Its Gaming portfolio features Xbox hardware, content, and subscription services, in addition to video games and royalties from third-party titles. Furthermore, it manages search services like Bing and Microsoft's advertising platforms. Microsoft distributes its extensive product line via numerous channels, including original equipment manufacturers, wholesale distributors, and various resellers, complementing direct sales through digital marketplaces, its own online storefronts, and physical retail outlets. The company, established in 1975, maintains its headquarters in Redmond, Washington.

 


VALUATION

P/E

28.75

Market Cap ($M USD)

$3.84T

Forward P/E

11.54

PEG

0.08

PRICE TO SALES

11.58

PRICE TO BOOK

8.69

EV / EBITDA

19.04

5-Year Average P/E

Free Cash Flow Yield

1.74%

DCF Value

$270.35

Graham Number

$155.31

Price to FCF

57.37

EV to FCF

58.98

Earnings Yield

3.48%

FCF Yield

1.74%

DIVIDEND

Yield

0.70%

Annual Payout

$3.64

Payout Ratio

19.77%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$18.00

Next Year EPS Growth Estimate

$44.85

Next Year Revenue Growth Estimate

$869.91B

Return on Equity (ROE)

33.22%

FREE CASH FLOW

Operating Margin

46.78%

Debt-to-Equity

0.29

Piotroski F-Score

6

Altman Z-Score

9.14

Return on Invested Capital (ROIC)

26.33%

Current Ratio

1.23

Quick Ratio

1.22

Net Debt to EBITDA

0.52

Interest Coverage

50.88

Gross Profit margin

67.94%

FCF PER SHARE

$9.02

REVENUE PER SHARE

$44.67

Gainseekers Quantitative Analysis

Summary

Microsoft’s current valuation paints a complex picture. The stock has traded significantly above its DCF Value, suggesting a potential overvaluation. However, a Forward P/E of 11.54 and a robust Altman Z-score of 9.14 indicate financial stability and growth potential. The Earnings Yield of 3.48% is modest, but the company’s high Return on Equity of 33.22% showcases exceptional management efficiency. Overall, the market seems to be pricing in Microsoft’s future growth, but the gap between its market price and intrinsic value raises questions about its current premium.

AI Exposure / Tech Reliance

Positioned within the Software - Infrastructure industry, Microsoft is at the forefront of AI and tech innovation. Its vast resources and strategic investments in AI technologies ensure it remains a key player in the evolving tech landscape. This adaptability is crucial for maintaining its competitive edge in a rapidly changing market.

The Bull Case

For value and GARP investors, Microsoft's appeal lies in its impressive ROIC of 26.33%, reflecting strong capital efficiency. The company's operating margin of 46.78% underscores its pricing power and ability to generate substantial profits. With a Piotroski F-Score of 6, Microsoft demonstrates solid financial health, while its FCF Yield, though low, is supported by a consistent cash flow generation. These metrics highlight a company with robust fundamentals and the potential for sustained growth.

The Bear Case

Despite its strengths, Microsoft's high Price/Book ratio of 8.69 and Price/Sales ratio of 11.58 suggest a valuation stretched by market optimism. The stock's proximity to its 52-week high indicates potential technical overextension. Additionally, the Price to FCF ratio of 57.37 raises concerns about cash flow valuation. While debt levels are manageable, these valuation metrics could deter investors wary of paying a premium for growth already priced in.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$563.50

Institutional Ownership %

1-Year Beta

1.10

Insider Buying % (6 Mo)

Distance to 52-Week High

6.99%

Distance to 52-Week Low

32.53%

EARNINGS SURPRISE %

11.79%

50-DAY SMA

$487.72

200-DAY SMA

$432.83

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.