Microsoft Valuation

Q: What is the Fair Price of MSFT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

MSFT (ARS15700) is trading above our estimate of [[fair value]] (ARS14226.23)

Is MSFT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of MSFT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MSFT (ARS15700) is trading above our estimate of fair value (ARS14226.23)

Significantly Below Fair Value: MSFT is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MSFT?

Key metric: As MSFT is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for MSFT. This is calculated by dividing MSFT's market cap by their current earnings.
What is MSFT's PE Ratio?
PE Ratio	34.1x
Earnings	US$90.51b
Market Cap	US$3.09t

MSFT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	12.2x
Enterprise Value/EBITDA	22.7x
PEG Ratio	2.7x

Price to Earnings Ratio vs Peers

How does MSFT's PE Ratio compare to its peers?

The above table shows the PE ratio for MSFT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	74.3x
ORCL Oracle	46.9x	16.5%	US$509.2b
NOW ServiceNow	155.3x	21.7%	US$208.7b
PANW Palo Alto Networks	49.1x	-2.3%	US$126.6b
FTNT Fortinet	46x	10.4%	US$72.2b
MSFT Microsoft	34.1x	12.5%	AR$3.1t

Price-To-Earnings vs Peers: MSFT is good value based on its Price-To-Earnings Ratio (34.1x) compared to the peer average (74.7x).

Price to Earnings Ratio vs Industry

How does MSFT's PE Ratio compare vs other companies in the Global Software Industry?

32 Companies	Price / Earnings	Estimated Growth	Market Cap

32 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: MSFT is expensive based on its Price-To-Earnings Ratio (34.1x) compared to the Global Software industry average (32x).

Price to Earnings Ratio vs Fair Ratio

What is MSFT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MSFT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	34.1x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate MSFT's Price-To-Earnings Fair Ratio for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.