MSFT Intrinsic Valuation and Fundamental Analysis - Microsoft Corp - Alpha Spread

Microsoft Corp
NASDAQ:MSFT

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Microsoft Corp
NASDAQ:MSFT
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Price: 416.32 USD 0.12% Market Closed
Market Cap: 3.1T USD
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Intrinsic Value

The intrinsic value of one MSFT stock under the Base Case scenario is 319.3 USD. Compared to the current market price of 416.32 USD, Microsoft Corp is Overvalued by 23%.

The Intrinsic Value is calculated as the average of DCF and Relative values:

MSFT Intrinsic Value
319.3 USD
Overvaluation 23%
Intrinsic Value
Price
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Base Case
Best Case

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Microsoft Corp

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Backtest Conclusion
Very Attractive
Current Valuation
+45%
Avg Valuation
-12%
Worst Valuation
-49%
Best Valuation
+45%

Stock is trading at its lowest valuation over the past 5 years.

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Fundamental Analysis

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(gross, operating, and net) of Microsoft Corp compared to its peers.

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Business Breakdown

Microsoft Corp. is a pioneering technology giant that has consistently evolved since its founding in 1975 by Bill Gates and Paul Allen. Initially revolutionizing the personal computing landscape with its Windows operating system, the company has adeptly transitioned into the cloud computing era, now dominated by Azure, its highly successful cloud platform. This strategic pivot not only solidified Microsoft’s position as a leader in cloud services but also enabled it to capture a growing share of the enterprise market, empowering businesses with scalable solutions. With a commitment to innovation, Microsoft continues to invest heavily in artificial intelligence, productivity tools, and the ga...

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Financials
Annual
Quarterly
TTM
Annual
Quarterly
TTM

Balance Sheet Decomposition
Microsoft Corp

Current Assets 159.7B
Cash & Short-Term Investments 75.5B
Receivables 67.4B
Other Current Assets 16.8B
Non-Current Assets 352.4B
Long-Term Investments 14.6B
PP&E 154.6B
Intangibles 146.8B
Other Non-Current Assets 36.5B
Current Liabilities 125.3B
Accounts Payable 22B
Accrued Liabilities 16.1B
Short-Term Debt 6.7B
Other Current Liabilities 80.5B
Non-Current Liabilities 118.4B
Long-Term Debt 67.5B
Other Non-Current Liabilities 50.9B
Efficiency

Earnings Waterfall
Microsoft Corp

Revenue
245.1B USD
Cost of Revenue
-74.1B USD
Gross Profit
171B USD
Operating Expenses
-61.6B USD
Operating Income
109.4B USD
Other Expenses
-21.3B USD
Net Income
88.1B USD

Free Cash Flow Analysis
Microsoft Corp

Last Value
3-Years Average
FCF Margin
Conversion Rate
Earnings Calls

Microsoft reported quarterly revenue of $64.7 billion, up 15%, with earnings per share of $2.95, up 10%. The company saw robust growth in commercial bookings by 17%, driven by significant Azure and Microsoft 365 contracts. Revenue from Microsoft Cloud was $36.8 billion, up 21%. The Activision acquisition impacted overall results, contributing to revenue growth but slightly dragging operating income. Future projections indicate revenue growth in low double digits, with AI infrastructure investments pushing FY '25 capital expenditures higher and operating margins slightly down. Microsoft's commitment includes substantial shareholder returns of over $34 billion in the fiscal year.

What is Earnings Call?
Fundamental Scores

MSFT Profitability Score
Profitability Due Diligence

Microsoft Corp's profitability score is 77/100. The higher the profitability score, the more profitable the company is.

Exceptional 3-Year Average ROE
Positive Free Cash Flow
Positive Gross Profit
Exceptional 3-Year Average ROIC
77/100
Profitability
Score

Microsoft Corp's profitability score is 77/100. The higher the profitability score, the more profitable the company is.

MSFT Solvency Score
Solvency Due Diligence

Microsoft Corp's solvency score is 81/100. The higher the solvency score, the more solvent the company is.

High Interest Coverage
High Altman Z-Score
Low D/E
Long-Term Solvency
81/100
Solvency
Score

Microsoft Corp's solvency score is 81/100. The higher the solvency score, the more solvent the company is.

Wall St
Price Targets

MSFT Price Targets Summary
Microsoft Corp

Wall Street analysts forecast MSFT stock price to rise over the next 12 months.

According to Wall Street analysts, the average 1-year price target for MSFT is 506.3 USD with a low forecast of 444.4 USD and a high forecast of 630 USD.

Lowest
Price Target
444.4 USD
7% Upside
Average
Price Target
506.3 USD
22% Upside
Highest
Price Target
630 USD
51% Upside
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Dividends

Dividend Yield
Lowest
Average
Highest
Dividend Per Share
N/A
Growth 3Y
Growth 5Y
Growth 10Y
Dividend Safety Score
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0
25
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100
Previous Payment
-
Today
Next Payment
-
Today
Oct 12, 2024
Previous Payment
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Ex-Dividend Date
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Shareholder Yield

Current shareholder yield for MSFT is .

Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?

Shareholder Yield
Dividend Yield
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Buyback Yield
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Debt Paydown Yield
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Average
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Ownership

MSFT Insider Trading
Buy and sell transactions by insiders

Cumulative Transactions Amount
Period Sold Bought Net
3 Months
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Profile

Microsoft Corp Logo
Microsoft Corp

Country

United States of America

Industry

Technology

Market Cap

3.1T USD

Dividend Yield

0.72%

Description

Microsoft Corp. engages in the development and support of software, services, devices, and solutions. The company is headquartered in Redmond, Washington and currently employs 181,000 full-time employees. The firm develops and supports a range of software products, services, devices, and solutions. The firm's segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The firm's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. The company also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. The company offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services. The company markets and distributes its products and services through original equipment manufacturers, direct, and distributors and resellers.

Contact

WASHINGTON
Redmond
1 Microsoft Way
+14258828080.0
www.microsoft.com

IPO

1986-03-13

Employees

181 000

Officers

See Also

Discover More
What is the Intrinsic Value of one MSFT stock?

The intrinsic value of one MSFT stock under the Base Case scenario is 319.3 USD.

Is MSFT stock undervalued or overvalued?

Compared to the current market price of 416.32 USD, Microsoft Corp is Overvalued by 23%.

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