MSFT Valuation

Microsoft Corp

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504.240

-1.48(-0.293%)1D

Overview
Forecast
Valuation
Earnings

MSFT Relative Valuation

MSFT's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, MSFT is overvalued; if below, it's undervalued.

Historical Valuation

Microsoft Corp (MSFT) is now in the Undervalued zone, suggesting that its current forward PE ratio of 32.51 is considered Undervalued compared with the five-year average of 30.30. The fair price of Microsoft Corp (MSFT) is between 546.48 to 621.71 according to relative valuation methord. Compared to the current price of 504.24 USD , Microsoft Corp is Undervalued By 7.73%.

Relative Value

Fair Zone

546.48-621.71

Current Price：504.24

7.73%

Undervalued

32.51

Trailing

Forward

19.87

EV/EBITDA

Microsoft Corp. (MSFT) has a current EV/EBITDA of 19.87. The 5-year average EV/EBITDA is 20.36. The thresholds are as follows: Strongly Undervalued below 16.53, Undervalued between 16.53 and 18.44, Fairly Valued between 22.27 and 18.44, Overvalued between 22.27 and 24.18, and Strongly Overvalued above 24.18. The current Forward EV/EBITDA of 19.87 falls within the Historic Trend Line -Fairly Valued range.

25.65

EV/EBIT

Microsoft Corp. (MSFT) has a current EV/EBIT of 25.65. The 5-year average EV/EBIT is 24.38. The thresholds are as follows: Strongly Undervalued below 19.48, Undervalued between 19.48 and 21.93, Fairly Valued between 26.83 and 21.93, Overvalued between 26.83 and 29.28, and Strongly Overvalued above 29.28. The current Forward EV/EBIT of 25.65 falls within the Historic Trend Line -Fairly Valued range.

11.65

Microsoft Corp. (MSFT) has a current PS of 11.65. The 5-year average PS is 10.41. The thresholds are as follows: Strongly Undervalued below 8.21, Undervalued between 8.21 and 9.31, Fairly Valued between 11.51 and 9.31, Overvalued between 11.51 and 12.62, and Strongly Overvalued above 12.62. The current Forward PS of 11.65 falls within the Overvalued range.

23.65

P/OCF

Microsoft Corp. (MSFT) has a current P/OCF of 23.65. The 5-year average P/OCF is 22.98. The thresholds are as follows: Strongly Undervalued below 18.55, Undervalued between 18.55 and 20.76, Fairly Valued between 25.20 and 20.76, Overvalued between 25.20 and 27.41, and Strongly Overvalued above 27.41. The current Forward P/OCF of 23.65 falls within the Historic Trend Line -Fairly Valued range.

50.45

P/FCF

Microsoft Corp. (MSFT) has a current P/FCF of 50.45. The 5-year average P/FCF is 35.86. The thresholds are as follows: Strongly Undervalued below 22.53, Undervalued between 22.53 and 29.19, Fairly Valued between 42.53 and 29.19, Overvalued between 42.53 and 49.19, and Strongly Overvalued above 49.19. The current Forward P/FCF of 50.45 falls within the Strongly Overvalued range.

Microsoft Corp (MSFT) has a current Price-to-Book (P/B) ratio of 10.91. Compared to its 3-year average P/B ratio of 11.35 , the current P/B ratio is approximately -3.88% higher. Relative to its 5-year average P/B ratio of 12.40, the current P/B ratio is about -12.00% higher. Microsoft Corp (MSFT) has a Forward Free Cash Flow (FCF) yield of approximately 1.91%. Compared to its 3-year average FCF yield of 2.52%, the current FCF yield is approximately -24.49% lower. Relative to its 5-year average FCF yield of 2.65% , the current FCF yield is about -28.06% lower.

10.91

P/B

Median3y

11.35

Median5y

12.40

1.91

FCF Yield

Median3y

2.52

Median5y

2.65

Competitors Valuation Multiple

The average P/S ratio for MSFT's competitors is 19.27, providing a benchmark for relative valuation. Microsoft Corp Corp (MSFT) exhibits a P/S ratio of 11.65, which is -39.54% above the industry average. Given its robust revenue growth of 18.10%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Palantir Technologies Inc

Performance Decomposition

Market capitalization of MSFT increased by 20.88% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 64.73B to 76.44B.

The secondary factor is the Margin Expansion, contributed 4.67%to the performance.

Overall, the performance of MSFT in the past 1 year is driven by Revenue Growth. Which is more sustainable.

18.10%

64.73B → 76.44B

Revenue Growth

4.67%

34.04 → 35.63

Margin Expansion

-1.89%

37.68 → 36.97

P/E Change

20.88%