MSFT

Microsoft Corporation

Fundamental data last updated:August 4, 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

25.81

Market Cap ($M USD)

$3.45T

Forward P/E

10.36

PEG

0.07

PRICE TO SALES

10.40

PRICE TO BOOK

7.80

EV / EBITDA

17.15

5-Year Average P/E

Free Cash Flow Yield

1.94%

DCF Value

$296.30

Graham Number

$155.31

Price to FCF

51.51

EV to FCF

53.12

Earnings Yield

3.87%

FCF Yield

1.94%

DIVIDEND

Yield

0.77%

Annual Payout

$3.56

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

8.39

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 been trading significantly above its DCF value, suggesting a potential overvaluation. However, the Forward P/E of 10.36 and a PEG ratio of 0.07 indicate that the market might be underestimating its growth potential. The Altman Z-score of 8.39 underscores its financial robustness, signaling low bankruptcy risk. Despite a high Price/Book ratio, the company’s earnings yield and strong return on equity suggest a well-managed enterprise with solid growth prospects.

AI Exposure / Tech Reliance

Positioned at the forefront of the Software - Infrastructure industry, Microsoft is exceptionally well-suited to capitalize on AI advancements. Its robust infrastructure and software capabilities provide a strong foundation for integrating cutting-edge technologies. This adaptability ensures it remains a leader in the rapidly evolving tech landscape.

The Bull Case

For the value-driven investor, Microsoft's appeal lies in its impressive ROIC of 26.33%, reflecting exceptional capital efficiency. The operating margin of 46.78% highlights its pricing power and operational excellence. A Piotroski F-Score of 6 indicates solid financial health, while a modest FCF yield suggests room for improvement. These metrics collectively tell a story of a company that knows how to generate and reinvest cash effectively, making it a compelling buy for those seeking growth at a reasonable price.

The Bear Case

Despite its strengths, Microsoft's high valuation multiples, such as a Price/Sales ratio of 10.40, raise concerns about its current price levels. The stock's proximity to its 52-week high suggests technical overextension, potentially limiting upside. Furthermore, a Price to FCF of 51.51 indicates that investors are paying a premium for its cash flow, which could be risky if growth expectations aren't met. These factors present a cautionary tale for those wary of paying top dollar for growth.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$541.88

Institutional Ownership %

1-Year Beta

1.13

Insider Buying % (6 Mo)

Distance to 52-Week High

19.15%

Distance to 52-Week Low

24.86%

EARNINGS SURPRISE %

11.79%

50-DAY SMA

$399.41

200-DAY SMA

$433.58

⚠️ 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.