Microsoft
NASDAQ: MSFT
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Stock Overview
Is now the right time to buy or sell Microsoft (MSFT) stock?
Table of Content
Value Indicator:
A company is undervalued if priced below our median valuation with a value score above 7.5, or strongly undervalued if below our low valuation. It’s overvalued if priced above our median valuation with a value score below 2.5, or strongly overvalued if above our high valuation.
Forecast:
This represents our projected price in the next 12 month. Multiple valuation algorithms are used, prioritizing the models that have proven most accurate historically.
Financial Overview
How does Microsoft overall financial health compare to the rest of the S&P 500?
Financial Pulse
100+ financial metrics are tested, but only those that most impact stock price are included. The metrics are grouped into the 6 financial categories. The final score is ranked against all S&P 500 companies, resulting in a 1 to 10 score (10 being the highest).
Section 1 - Value:
Determines whether Microsoft is undervalued, fairly valued, or overvalued by comparing its current market price to intrinsic value estimates based on financial analysis and valuation models.
Section 2 - Returns:
Measures how Microsoft returns perform relative to the S&P 500, providing insights into whether the stock is outperforming, matching, or underperforming the broader market benchmark.
Section 3 - Profitability:
Evaluates how effectively Microsoft controls its expenses to optimize profitability, reflecting its ability to balance operational costs with revenue generation.
Section 4 - Liquidity:
Assesses Microsoft ability to balance its cash flow with debt obligations, indicating financial stability and the capacity to meet short and long-term liabilities.
Section 5 - Management:
Measures how effectively Microsoft management utilizes its assets and capital to generate returns, highlighting the company’s operational and financial efficiency.
Section 6 - Dividend:
Evaluates the consistency and stability of Microsoft dividend payouts, assessing the company’s ability to sustain and grow dividends while maintaining financial health.
Trading Signals
Do trading signals indicate a bullish or bearish opportunity for Microsoft (MSFT)?
RANK
If the price is below our 12-month low forecast and the valuation score is above 7.5, it signals a strong bullish signal
(bright green).
If the price is below the 12-month median forecast with a valuation score above 7.5, it indicates a bullish signal
(dark green). The opposite applies for bearish signals.
Rankings are based on how a company's value, financial health, and returns compare to others in the S&P 500. Key price levels are determined by identifying past highs (resistance) and lows (support) and filtering minor fluctuations for consistency.
Risk & Reward
How does Microsoft risk and future returns compare vs the S&P 500?
Reward reflects a company’s potential growth over the next 12 months. Risk is based on financial stability, calculated with key metrics linked to stock price. Market risk and reward use the average scores of all companies in the same sector.
Recent News
What are the recent and trending news highlights for Microsoft?
| Date | Title |
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Financial Calendar
What are the key upcoming financial events for Microsoft?
Earnings Calendar
Quick comparison of Microsoft actual earnings per share (EPS) to the targets set by analysts.| Report | Type | Target | Actual | Surprise |
|---|
Dividend Calendar
Upcoming dates to receive Microsoft next dividend, along with a history of dividend payouts.| Ex-Div | Payment | Dividend | Status |
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Company Outlook
What risks and opportunities does Microsoft face based on its recent earnings calls?
Management Guidance
Microsoft projections on revenue, earnings, expenses, and goals to inform investors about the company’s outlook.| Qtr | Insight |
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Risks & Challenges
Microsoft potential obstacles such as market changes, operational issues, regulatory updates, and external events.| Quarter | Insight |
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About The Company
What are the key highlights of Microsoft operations and history?
| Key Facts | Details |
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Company Description
End of Section: Overview
1
Valuation Overview
Is Microsoft undervalued, fairly valued, or overvalued?
| Ratios | Last 10Y | TTM | Rank |
|---|
A green rank means the company is among the 25% of S&P 500 companies with the lowest valuations, indicating it may be undervalued. A red rank means it’s in the top 25% with the highest valuations, suggesting it may be overvalued. Bar chart colors indicate if metrics are improving or declining.
Table of Content
EV Multiple:
Measures a company's total value relative to its core earnings. A higher multiple may suggest market confidence in growth.
P/S Ratio:
Compares stock price to sales; lower values can indicate a better deal relative to revenue.
P/E Ratio:
Shows how much investors pay for each dollar of earnings. High P/E suggests growth potential, low P/E might mean undervaluation.
P/B Ratio:
Compares price to asset value. Lower values suggest undervaluation; higher means investor confidence.
P/FCF Ratio:
Looks at price versus cash flow after expenses. Lower values mean you're paying less per dollar of cash generated.
Forecast Accuracy:
Measures how closely the predicted year-end price aligns with the actual year-end price, showing the reliability of price forecasts.
1.1
Fair Value
What is Microsoft's fair value price based on our estimates?
1.2
12-Month Price Forecast
What is Microsoft price forecast for the next 12 months??
Accuracy
1.3A
Earnings Growth vs Value
How does Microsoft valuation and future earnings growth compare to it's sector?
Yearly earnings growth forecast = [(next year net income forecast - last year net income actual) / 2], capped at -100% to +100% for visualization. The P/E ratio is capped at 0 to 100. Sector metrics reflect the median values of all companies in the sector.
1.3B
Revenue Growth vs Value
How does Microsoft valuation and future revenue growth compare to it's sector?
Yearly revenue growth forecast = [(next year revenue forecast - last year revenue actual) / 2], capped at -100% to +100% for visualization. The P/S ratio is capped at 0 to 100. Sector metrics reflect the median values of all companies in the sector.
1.4
Model Accuracy
What approaches are considered effective for estimating Microsoft fair value?
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1.5
Variable Accuracy
What key factors have impacted Microsoft fair value over time?
1.6
Under & Overvalued Companies
Which companies in the technology sector are the most under or overvalued?
Top 5 Undervalued Companies
Companies are ranked within the technology sector, and only those rated as undervalued are selected.| Rank | Symbol | Name | Price | Financial |
|---|
Top 5 Overvalued Companies
Companies are ranked within the technology sector, and only those rated as overvalued are selected.| Rank | Symbol | Name | Price | Financial |
|---|
End of Section 1: Valuation
2
Returns Overview
How does Microsoft returns compare vs the S&P 500?
| Returns | Last 10Y | TTM | Rank |
|---|
A green rank means the company is in the top 25% of S&P 500 companies. A red rank means it’s in the bottom 25%. Bar chart colors indicate if metrics are improving or declining.
Table of Content
5Y Beta:
Measure of a stock's volatility compared to the overall market over the past five years; a higher beta means more volatility, while a lower beta indicates more stability.
10Y Annual Return:
Average yearly gain or loss of an investment over the past 10 years, showing how it has performed on a yearly basis during that period.
10Y Annual Alpha:
Average yearly performance of an investment over the past 10 years compared to the S&P 500, showing its outperformance or underperformance.
2.1
Returns Against S&P 500
Have the historical returns of Microsoft outperformed the S&P 500?
The returns for the S&P 500 and the sector are calculated using a weighted average based on market capitalization, meaning larger companies have a greater influence on the overall return. This method reflects actual market dynamics by accounting for the size of each company.
2.2
Historical Returns
What key factors have driven Microsoft returns over the past ten years?
2.3
Historical Returns vs EV Multiple
How does Microsoft historical annual returns and current EV multiple compare to it's sector?
Historical returns are calculated as the average of annual returns over the past 10 years. The EV multiple, specifically EV/EBITDA, measures a company's current enterprise value relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA). Sector metrics reflect the median values of all companies in the sector.
Historical returns is capped at 0 to +100% and the EV multiple is capped at -100x to 100x for visualization.
2.4
Growth & Decline
What are the reasons behind Microsoft downturns, growth, and recovery cycles in the past five years?
| Downturn & Decline Insights |
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Insights are powered by AI and are based on available data; they may contain inaccuracies or miss context.
| Growth & Recovery Insights |
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Insights are powered by AI and are based on available data; they may contain inaccuracies or miss context.
2.5
Technical Analysis
What is the likely direction of a Microsoft price based on its historical price?
RSI
MOMENTUM
COPPOCK
TRIX
RSI measures the speed and magnitude of recent price changes to identify overbought or oversold conditions. Momentum is a straightforward measure of the rate of change in a security’s price over a specific period, helping to gauge the strength of a trend. The Coppock Curve is a long-term momentum indicator designed to identify buying opportunities by combining weighted moving averages of price changes and smoothing them over time. TRIX (Triple Exponential Moving Average) is a momentum oscillator that filters out insignificant price movements to focus on longer-term trends, highlighting both the direction and strength of a trend.
2.6
Price Volatility
How much does Microsoft daily stock price change within each month over the past 12 months?
A boxplot, also known as a box-and-whisker plot, is a simple way to show how data is spread out and where most values lie. The rectangle (the "box") shows the range where the middle 50% of values fall, with a line inside marking the middle value (median). The lines extending from the box (the "whiskers") show the full range of most data, excluding extreme points called outliers, which are shown as dots. A tall box or long whiskers mean the data varies a lot, while a shorter box means the data is more consistent. It's a quick way to see how data compares across groups or time periods and spot unusual values.
End of Section 2: Returns
3
Profitability Overview
How effectively does Microsoft manage costs to maximize profitability?
| Profitability | Last 10Y | TTM | Rank |
|---|
A green rank means the company is in the top 25% of S&P 500 companies. A red rank means it’s in the bottom 25%. Bar chart colors indicate if metrics are improving or declining.
Revenue Growth:
The increase in a company’s sales over time. It shows how well the company is expanding, attracting customers, or selling more products.
Gross Margin:
Percentage of revenue remaining after production costs. It reflects how efficiently a company manages costs relative to sales.
Operation Margin:
Percentage of revenue left after covering both production and operating expenses. It shows how efficiently a company manages overall costs relative to its sales.
Net Margin:
Percentage of revenue left after all expenses, including taxes and interest. It indicates the company’s overall profitability from total sales.
Tax Rate:
Percentage of a company’s profits paid as taxes. It shows how much of earnings go to government obligations.
OCF/Share
Operating cash flow per share is the cash generated from operations divided by the number of shares. It shows how much cash each share produces, reflecting financial health and cash efficiency.
FCF/Share
Free cash flow per share is the cash remaining after expenses and investments, divided by the number of shares. It shows the cash available per share for dividends, debt reduction, or growth.
End of Section 3: Profitability
4
Liquidity Overview
How well does Microsoft balance cash flow and debt obligations?
| Liquidity | Last 10Y | TTM | Rank |
|---|
A green rank means the company is in the top 25% of S&P 500 companies. A red rank means it’s in the bottom 25%. Bar chart colors indicate if metrics are improving or declining.
Debt to Equity:
Compares a company’s total debt to its shareholder equity. It shows how much of the company’s financing comes from debt versus owner investments, indicating financial leverage and risk level.
Quick Ratio:
Measure of a company’s ability to meet short-term liabilities using only its most liquid assets, like cash and receivables.
Days of Sales Outstanding:
Measures the average number of days it takes for a company to collect payment after a sale. It reflects how efficiently the company manages credit and collections.
AR Turns:
Accounts receivable turnover measures how many times a company collects its average accounts receivable in a period. It indicates the efficiency of the company’s credit and collection process.
AP Turns:
Accounts payable turnover measures how often a company pays off its average accounts payable within a period. It reflects how efficiently the company manages its payments to suppliers.
Cash/Share
Amount of cash a company holds divided by its total number of shares. It indicates the cash available per share, showing liquidity.
End of Section 4: Liquidity
5
Management Overview
How efficiently does Microsoft management utilize assets and capital to generate returns?
| Management | Last 10Y | TTM | Rank |
|---|
A green rank means the company is in the top 25% of S&P 500 companies. A red rank means it’s in the bottom 25%. Bar chart colors indicate if metrics are improving or declining.
Market Cap:
Total value of a company’s outstanding shares of stock. It’s calculated by multiplying the share price by the number of shares.
ROC:
Return on capital measures how effectively a company generates profits from its invested capital. It shows how well management is using funds from both debt and equity to grow the business and create value.
ROA:
Return on assets measures how efficiently a company uses its assets to generate profit. It shows how well management turns the company’s assets into earnings.
Days of Inventory Outstanding:
Measures the average number of days a company holds inventory before selling it. It indicates how efficiently the company manages its stock and how quickly products move through the supply chain.
Inventory Turnover:
Measures how many times a company sells and replaces its inventory over a year. It shows how efficiently inventory is managed and how quickly products are sold.
Full-Time Employees:
Total number of employees working full time for a company, typically meeting a standard number of hours per week (often 35–40 hours). This count provides insight into the company’s workforce size and operational capacity.
End of Section 5: Management
6
Dividend Overview
How reliable and safe is Microsoft’s dividend for shareholders?
| Dividend | Last 10Y | TTM | Rank |
|---|
Dividend Yield:
Percentage of a stock’s price paid out in annual dividends. It shows the income investors earn per dollar invested.
Payout Ratio:
Percentage of a company’s earnings paid to shareholders as dividends. It shows how much profit is returned to investors versus reinvested in the business.
6.1
Dividend Calendar
When is the deadline to own Microsoft stock to receive the next dividend payment?
Latest Dividend Payment
| Ex-Dividend Date | |
| Dividend Payment Date | |
| Dividend per Share |
Upcoming Dividend Payment
| Ex-Dividend Date | |
| Dividend Payment Date | |
| Dividend per Share |
6.2
Dividend Yield
How has Microsoft's dividend yield performed over time?
6.3
Payout Ratio
How reliably can Microsoft provide dividend payouts to shareholders?
6.4
Dividend History
Has Microsoft's dividend payments been increasing over time?
End of Section 6: Dividend
7
Economic Indicators
What are the most important economic indicators for understanding market conditions and overall economic health?
Consumer Sentiment
Measures how optimistic or pessimistic people feel about the economy, their finances, and future spending. It is measured through surveys on income, employment, and economic conditions. High sentiment suggests confidence and increased spending, while low sentiment signals worry and reduced spending, affecting economic growth.Unemployment
Portion of the labor force that is actively seeking work but unable to find a job. It’s a key economic indicator that shows the health of the job market. A low unemployment rate suggests a strong economy with plenty of job opportunities, while a high rate indicates economic struggles, with fewer jobs available and more people looking for work.Retail Sales
Tracks the total revenue retailers make, usually monthly. It measures consumer spending on goods like clothing, electronics, and food. Rising retail sales indicate strong consumer confidence and economic growth, while a decline suggests lower confidence and a slowing economy.Durable Goods Orders
Durable goods are long-lasting products, like cars, appliances, and machinery, designed to last three years or more. The Durable Goods Orders metric tracks new orders for these items, signaling economic confidence. Rising orders suggest growth, while a drop may indicate a slowdown.Market Volatility (VIX)
CBOE Volatility Index (VIX), known as the "fear gauge," shows how much market volatility investors expect. A high VIX means people are anticipating big market swings, signaling uncertainty or fear, while a low VIX suggests stability and less risk.Fed Rate
The interest rate banks use to lend money to each other overnight. It affects borrowing costs for everyone. When the Fed raises the rate, borrowing gets more expensive, slowing spending and inflation. Lowering the rate makes borrowing cheaper, boosting spending and economic activity.Inflation
Rate at which prices for goods and services rise over time, usually shown as an annual percentage. For example, a 3% inflation rate means prices have increased by 3% over the past year. It's measured using tools like the Consumer Price Index (CPI), and central banks monitor it to maintain price stability and support economic growth.Yield Curve
A yield spread is the difference between the interest rates of two bonds (10-year and 1-year). A positive spread means the 10-year bond has a higher rate, signaling confidence in long-term growth, as investors expect higher returns over time. A negative spread (inverted yield curve) happens when the 1-year bond has a higher rate, which can be a warning sign that investors expect short-term risks or a potential recession, as they prefer the safety of long-term bonds even with lower returns.Gross Domestic Product (GDP)
Measures the total value of goods and services produced in a country over a set period, typically a year. It indicates the economy's health—rising GDP means businesses are thriving, people have jobs, and spending is strong, while a declining GDP may signal economic issues.Industrial Production Index (IPI)
Measures the output of key industrial sectors: manufacturing, mining, and utilities. It shows how much these industries are producing over time, typically monthly. A rising IPI signals increased industrial activity, reflecting stronger demand and economic growth, while a decline suggests lower production and potential economic slowdowns.New Homes Sales
Tracks the number of newly built homes sold in a given period, typically monthly. It reflects the health of the housing market and overall economy. Higher sales indicate strong demand, economic confidence, and growth in the construction sector, while lower sales may signal a slowing economy or declining consumer confidence.
End of Section 7: Economy
7
Earnings Overview
How has Microsoft performed quarterly and what is management's response?
7.1
Latest Earnings Report
How did Microsoft latest quarterly performance measure up against analyst expectations?
Latest Quarter's Earnings
| Quarter | |
| Report Date | |
| Earnings | |
| Revenue | |
| SEC Filing |
Upcoming Quarter's Earnings
| Quarter | |
| Report Date | |
| Earnings | |
| Revenue |
7.2A
Earnings Per Share vs Target
How has Microsoft earnings performed in the last 4 quarters?
7.2B
Revenue vs Target
How has Microsoft revenue performed in the last 4 quarters?
7.3
Earnings Call Summary
What are the key takeaways from Microsoft recent earnings call?
End of Section 7: Earnings