Microsoft Corporation

WBAG:MSFT Stock Report

Market Cap: €2.9t

Microsoft Valuation

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

Valuation Score

4/6

Valuation Score 4/6

  • 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 (€394.25) is trading below our estimate of fair value (€520.64)

Significantly Below Fair Value: MSFT is trading below fair value by more than 20%.

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 Ratio34.1x
EarningsUS$90.51b
Market CapUS$3.09t

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.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average74.7x
ORCL Oracle
46.4x16.5%US$509.2b
NOW ServiceNow
156.2x21.7%US$208.7b
PANW Palo Alto Networks
49.1x-2.3%US$126.6b
FTNT Fortinet
47.2x10.4%US$72.2b
MSFT Microsoft
34.1x12.6%€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 European Software Industry?

5 CompaniesPrice / EarningsEstimated GrowthMarket Cap
MSFT 34.1xIndustry Avg. 27.7xNo. of Companies17PE020406080100+
5 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: MSFT is expensive based on its Price-To-Earnings Ratio (34.1x) compared to the European Software industry average (27.7x).

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 Ratio34.1x
Fair PE Ration/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?

The above table shows the analyst MSFT forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€394.25
€479.48
+21.6%
7.6%€569.94€398.96n/a48
Nov ’25€381.95
€465.32
+21.8%
7.6%€553.68€387.58n/a48
Oct ’25€379.80
€451.73
+18.9%
6.3%€540.18€396.13n/a50
Sep ’25€375.20
€448.05
+19.4%
6.6%€536.10€393.14n/a51
Aug ’25€388.55
€462.74
+19.1%
6.8%€556.02€398.20n/a52
Jul ’25€421.00
€459.53
+9.2%
7.8%€561.78€402.33n/a51
Jun ’25€375.05
€444.77
+18.6%
7.5%€552.42€368.00n/a52
May ’25€370.95
€447.43
+20.6%
7.2%€562.08€374.44n/a52
Apr ’25€388.80
€437.69
+12.6%
7.4%€558.60€372.12n/a53
Mar ’25€380.95
€430.33
+13.0%
7.4%€554.52€369.40n/a51
Feb ’25€372.20
€420.37
+12.9%
8.4%€552.00€340.40n/a49
Jan ’25€339.90
€374.49
+10.2%
9.7%€540.30€268.44n/a51
Dec ’24€342.15
€370.24
+8.2%
6.9%€432.39€271.36n/a50
Nov ’24€326.85
€381.05
+16.6%
6.6%€425.21€281.67€381.9550
Oct ’24€300.15
€372.51
+24.1%
7.4%€416.33€282.06€379.8049
Sep ’24€304.20
€357.04
+17.4%
10.0%€403.30€212.65€375.2049
Aug ’24€307.80
€355.29
+15.4%
9.7%€409.73€211.24€388.5550
Jul ’24€312.35
€318.50
+2.0%
10.9%€412.65€212.74€421.0046
Jun ’24€306.70
€319.70
+4.2%
10.7%€421.07€217.08€375.0547
May ’24€276.85
€302.13
+9.1%
9.3%€382.83€211.47€370.9548
Apr ’24€261.65
€274.80
+5.0%
12.2%€387.20€195.44€388.8047
Mar ’24€231.70
€275.78
+19.0%
11.2%€387.74€200.00€380.9547
Feb ’24€225.90
€263.20
+16.5%
11.5%€378.08€195.02€372.2047
Jan ’24€223.60
€279.21
+24.9%
11.4%€386.59€220.10€339.9045
Dec ’23€241.30
€296.27
+22.8%
11.5%€410.01€233.44€342.1544
Nov ’23€231.25
€304.16
+31.5%
11.0%€416.10€258.16€326.8542

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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