Microsoft Valuation

Is MSFTD 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 MSFTD when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MSFTD ($14.65) is trading above our estimate of fair value ($13.27)

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

Key Valuation Metric

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

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

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

MSFTD 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 MSFTD's PE Ratio compare to its peers?

The above table shows the PE ratio for MSFTD 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
MSFTD Microsoft	34.1x	12.5%	US$3.1t

Price-To-Earnings vs Peers: MSFTD 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 MSFTD'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: MSFTD 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 MSFTD'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.

MSFTD 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 MSFTD'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.