Microsoft Corporation

DB:MSF Stock Report

Market Cap: €2.9t

Microsoft Valuation

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

Valuation Score

5/6

Valuation Score 5/6

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

Below Fair Value: MSF (€392.25) is trading below our estimate of fair value (€528.96)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for MSF. This is calculated by dividing MSF's market cap by their current earnings.
What is MSF's PE Ratio?
PE Ratio34.1x
EarningsUS$90.51b
Market CapUS$3.09t

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for MSF vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average78.8x
SAP SAP
92.6x40.8%€254.3b
ORCL Oracle
46.9x16.5%US$509.2b
NOW ServiceNow
155.3x21.7%US$208.7b
IXX init innovation in traffic systems
20.3x27.8%€370.4m
MSF Microsoft
34.2x12.6%€3.1t

Price-To-Earnings vs Peers: MSF is good value based on its Price-To-Earnings Ratio (34.2x) compared to the peer average (78.8x).

Price to Earnings Ratio vs Industry

How does MSF's PE Ratio compare vs other companies in the European Software Industry?

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

Price-To-Earnings vs Industry: MSF is expensive based on its Price-To-Earnings Ratio (34.2x) compared to the European Software industry average (27.7x).

Price to Earnings Ratio vs Fair Ratio

What is MSF'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.

MSF PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio34.1x
Fair PE Ratio63.1x

Price-To-Earnings vs Fair Ratio: MSF is good value based on its Price-To-Earnings Ratio (34.2x) compared to the estimated Fair Price-To-Earnings Ratio (63.1x).

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 MSF forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€392.25
€479.48
+22.2%
7.6%€569.94€398.96n/a48
Nov ’25€379.10
€465.32
+22.7%
7.6%€553.68€387.58n/a48
Oct ’25€380.45
€451.73
+18.7%
6.3%€540.18€396.13n/a50
Sep ’25€376.50
€448.05
+19.0%
6.6%€536.10€393.14n/a51
Aug ’25€386.70
€462.74
+19.7%
6.8%€556.02€398.20n/a52
Jul ’25€423.30
€459.53
+8.6%
7.8%€561.78€402.33n/a51
Jun ’25€381.35
€444.77
+16.6%
7.5%€552.42€368.00n/a52
May ’25€365.65
€447.43
+22.4%
7.2%€562.08€374.44n/a52
Apr ’25€389.45
€437.69
+12.4%
7.4%€558.60€372.12n/a53
Mar ’25€382.85
€430.33
+12.4%
7.4%€554.52€369.40n/a51
Feb ’25€371.10
€420.37
+13.3%
8.4%€552.00€340.40n/a49
Jan ’25€339.90
€374.49
+10.2%
9.7%€540.30€268.44n/a51
Dec ’24€344.00
€370.24
+7.6%
6.9%€432.39€271.36n/a50
Nov ’24€327.80
€381.05
+16.2%
6.6%€425.21€281.67€379.1050
Oct ’24€299.10
€372.51
+24.5%
7.4%€416.33€282.06€380.4549
Sep ’24€304.80
€357.04
+17.1%
10.0%€403.30€212.65€376.5049
Aug ’24€307.95
€355.29
+15.4%
9.7%€409.73€211.24€386.7050
Jul ’24€312.15
€318.50
+2.0%
10.9%€412.65€212.74€423.3046
Jun ’24€308.95
€319.70
+3.5%
10.7%€421.07€217.08€381.3547
May ’24€277.40
€302.13
+8.9%
9.3%€382.83€211.47€365.6548
Apr ’24€265.20
€274.80
+3.6%
12.2%€387.20€195.44€389.4547
Mar ’24€231.10
€275.78
+19.3%
11.2%€387.74€200.00€382.8547
Feb ’24€230.05
€263.20
+14.4%
11.5%€378.08€195.02€371.1047
Jan ’24€223.60
€279.21
+24.9%
11.4%€386.59€220.10€339.9045
Dec ’23€242.65
€296.27
+22.1%
11.5%€410.01€233.44€344.0044
Nov ’23€230.65
€304.16
+31.9%
11.0%€416.10€258.16€327.8042

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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