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 28.78 is considered Undervalued compared with the five-year average of 30.37. The fair price of Microsoft Corp (MSFT) is between 534.80 to 614.59 according to relative valuation methord. Compared to the current price of 477.73 USD , Microsoft Corp is Undervalued By 10.67%.
Relative Value
Fair Zone
534.80-614.59
Current Price：477.73
10.67%
Undervalued
28.97
PE
1Y
3Y
5Y
Trailing
Forward
17.36
EV/EBITDA
Microsoft Corp. (MSFT) has a current EV/EBITDA of 17.36. The 5-year average EV/EBITDA is 20.26. The thresholds are as follows: Strongly Undervalued below 16.40, Undervalued between 16.40 and 18.33, Fairly Valued between 22.19 and 18.33, Overvalued between 22.19 and 24.12, and Strongly Overvalued above 24.12. The current Forward EV/EBITDA of 17.36 falls within the Undervalued range.
23.09
EV/EBIT
Microsoft Corp. (MSFT) has a current EV/EBIT of 23.09. The 5-year average EV/EBIT is 24.41. The thresholds are as follows: Strongly Undervalued below 19.54, Undervalued between 19.54 and 21.97, Fairly Valued between 26.85 and 21.97, Overvalued between 26.85 and 29.28, and Strongly Overvalued above 29.28. The current Forward EV/EBIT of 23.09 falls within the Historic Trend Line -Fairly Valued range.
10.51
PS
Microsoft Corp. (MSFT) has a current PS of 10.51. The 5-year average PS is 10.50. The thresholds are as follows: Strongly Undervalued below 8.27, Undervalued between 8.27 and 9.39, Fairly Valued between 11.61 and 9.39, Overvalued between 11.61 and 12.73, and Strongly Overvalued above 12.73. The current Forward PS of 10.51 falls within the Historic Trend Line -Fairly Valued range.
19.84
P/OCF
Microsoft Corp. (MSFT) has a current P/OCF of 19.84. The 5-year average P/OCF is 22.95. The thresholds are as follows: Strongly Undervalued below 18.49, Undervalued between 18.49 and 20.72, Fairly Valued between 25.18 and 20.72, Overvalued between 25.18 and 27.40, and Strongly Overvalued above 27.40. The current Forward P/OCF of 19.84 falls within the Undervalued range.
49.79
P/FCF
Microsoft Corp. (MSFT) has a current P/FCF of 49.79. The 5-year average P/FCF is 37.04. The thresholds are as follows: Strongly Undervalued below 21.98, Undervalued between 21.98 and 29.51, Fairly Valued between 44.56 and 29.51, Overvalued between 44.56 and 52.09, and Strongly Overvalued above 52.09. The current Forward P/FCF of 49.79 falls within the Overvalued range.
Microsoft Corp (MSFT) has a current Price-to-Book (P/B) ratio of 9.78. Compared to its 3-year average P/B ratio of 11.35 , the current P/B ratio is approximately -13.81% higher. Relative to its 5-year average P/B ratio of 12.25, the current P/B ratio is about -20.14% higher. Microsoft Corp (MSFT) has a Forward Free Cash Flow (FCF) yield of approximately 0.00%. Compared to its 3-year average FCF yield of 2.38%, the current FCF yield is approximately -100.00% lower. Relative to its 5-year average FCF yield of 2.59% , the current FCF yield is about -100.00% lower.
9.85
P/B
Median3y
11.35
Median5y
12.25
2.20
FCF Yield
Median3y
2.38
Median5y
2.59
Competitors Valuation Multiple
The average P/S ratio for MSFT's competitors is 5.68, providing a benchmark for relative valuation. Microsoft Corp Corp (MSFT) exhibits a P/S ratio of , which is -100.00% above the industry average. Given its robust revenue growth of 18.43%, this premium appears unsustainable.
P/S
P/E
EV/EBITDA
EV/EBIT
P/S
Revenue Growth
Market Cap
Performance Decomposition
1Y
3Y
5Y
Market capitalization of MSFT increased by 14.08% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 65.59B to 77.67B.
The secondary factor is the P/E Change, contributed 0.68%to the performance.
Overall, the performance of MSFT in the past 1 year is driven by Revenue Growth. Which is more sustainable.
People Also Watch
FAQ
Is Microsoft Corp (MSFT) currently overvalued or undervalued?
What is Microsoft Corp (MSFT) fair value?
How does MSFT's valuation metrics compare to the industry average?
What is the current P/B ratio for Microsoft Corp (MSFT) as of Dec 05 2025?
What is the current FCF Yield for Microsoft Corp (MSFT) as of Dec 05 2025?
What is the current Forward P/E ratio for Microsoft Corp (MSFT) as of Dec 05 2025?