MSFT Microsoft Corporation - Fundamental Analysis
BULLISH
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MSFT Stock | Fundamental Analysis & Investment Insights
NASDAQ
Technology
Software - Infrastructure
Current Price
Live
$459.86
Analyst Target
$622.04
+35.3%
Upside
52W High
$555.45
52W Low
$344.79
At a glance
Key valuation, profitability, growth, and risk metrics.
Updated Jan 17, 2026
Market cap
$3.42T
P/E
32.68
ROE
32.2%
Profit margin
35.7%
Debt/Equity
0.33
Dividend yield
0.8%
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
88%
Analysis Accuracy
Microsoft's deterministic health scores indicate stable financial strength with a Piotroski F-Score of 6/9, reflecting solid profitability and leverage metrics, though the absence of an Altman Z-Score prevents a full distress risk assessment. The company demonstrates exceptional profitability, with a 35.71% profit margin, 48.87% operating margin, and ROE of 32.24%, significantly outperforming sector averages. Despite a high valuation (P/E of 32.68 vs. sector avg 110.71), robust 18.40% YoY revenue growth and strong analyst consensus (strong_buy) support premium pricing. However, recent insider selling and short-term price weakness signal caution, even as long-term fundamentals remain compelling.
Key Strengths
Exceptional profitability metrics: 35.71% net margin, 48.87% operating margin, and 68.76% gross margin well above sector averages
Strong return ratios: ROE of 32.24% exceeds sector average of 29.27%, indicating efficient equity use
Healthy balance sheet: Debt/Equity of 0.33 and Current Ratio of 1.40 reflect conservative leverage and solid liquidity
Robust revenue growth: 18.40% YoY revenue growth outpaces most large-cap peers and is close to sector average of 19.33%
High analyst conviction: 53 analysts rate MSFT a 'strong_buy' with a $622.04 target, implying ~35% upside
Key Risks
Rich valuation: P/E of 32.68 is high historically, though justified by growth and quality; Forward P/E of 24.53 still above market median
Insider selling trend: 3 sell transactions totaling $27.6M in last 6 months with no buys, signaling potential caution from executives
Technical bearishness: Technical Trend score of 0/100 and recent price declines (-9.5% over 6M, -4.0% over 1W) suggest short-term weakness
Missing key financial data: Absence of Altman Z-Score, ROIC, EV, and cash/debt figures limits full financial health verification
Dividend not a strength: Dividend Strength score of 25/100 and yield of 0.80% make it less attractive for income investors
AI Fair Value Estimate
Based on comprehensive analysis
$520.0
+13.1% above current price
Performance Snowflake
Multi-dimensional analysis across 5 key categories
Overall
74
Strong
65
90
88
78
50
AI Verdict
Strong long-term investment with premium valuation supported by quality and growth
Key drivers: High profitability and ROE, Consistent earnings beats and growth, Strong analyst support, Balanced leverage and liquidity, Premium valuation
Confidence
90%
Value
65/100
Ref P/E, PEG, Graham Number
Positives
- Forward P/E of 24.53 is more reasonable than current P/E of 32.68
- Valuation lower than many tech peers (e.g., AVGO 72.47, NVDA 45.64)
Watchpoints
- Current P/E of 32.68 is elevated
- Price ($459.86) significantly above Graham Number ($124.34)
Future
90/100
Ref Growth rates
Positives
- 18.40% YoY revenue growth
- 12.70% earnings growth
- Consistent Q/Q and Y/Y growth trends
Watchpoints
No urgent risks highlighted.
Past
88/100
Ref Historical trends
Positives
- 24 out of 25 quarters beat EPS estimates
- Average earnings surprise of +5.69%
- Consistent upward EPS progression
Watchpoints
- One earnings miss in Q3 2022 (surprise -2.7%)
Health
78/100
Ref Altman Z-Score, Piotroski F-Score
Positives
- Piotroski F-Score of 6/9 indicates stable financial health
- Debt/Equity of 0.33 shows conservative capital structure
- Current and Quick Ratios (1.40, 1.25) indicate solid short-term liquidity
Watchpoints
- Altman Z-Score not available, limiting distress risk analysis
Dividend
50/100
Ref Yield, Payout
Positives
- Payout ratio of 23.61% is sustainable and leaves room for growth
Watchpoints
- Dividend Strength score of 25/100
- Yield of 0.80% is low for income-focused investors
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Current Price
$459.86
Analyst Target
$622.04
Upside/Downside
+35.3%
Multi-Horizon Performance vs Peers
Price momentum across 5Y → 1W horizons for MSFT and closest competitors.
Updated 2026-01-16
| Company | 5Y | 3Y | 1Y | 6M | 1M | 1W |
|---|---|---|---|---|---|---|
|
MSFT
Microsoft Corporation
Primary
|
+121.4% | +95.9% | +9.1% | -9.5% | -3.4% | -4.0% |
|
AAPL
Apple Inc.
Peer
|
+107.1% | +66.3% | +19.8% | +7.1% | -9.2% | -2.9% |
|
NVDA
NVIDIA Corporation
Peer
|
+1333.8% | +953.1% | +39.5% | +8.0% | +8.9% | +0.7% |
|
AVGO
Broadcom Inc.
Peer
|
+665.4% | +472.2% | +34.4% | +10.7% | -8.6% | -9.0% |
|
ASML
ASML Holding N.V.
Peer
|
+160.4% | +141.1% | +109.7% | +95.9% | +2.1% | -1.3% |
Positive values indicate cumulative gains over the specified period. Comparables pulled from the same sector to highlight whether momentum is stock-specific or industry-wide.
Historical Performance Trends
Long-term financial metrics and growth patterns
Revenue & Net Income
Profit & Operating Margins
Return on Equity (ROE)
Quarterly Revenue Growth
Historical data shows last 12 quarters (3 years)
Valuation Metrics
Key valuation ratios and pricing indicators
P/E Ratio
32.68
Forward P/E
24.53
PEG Ratio
N/A
P/B Ratio
9.42
P/S Ratio
11.63
EV/Revenue
11.7
EV/EBITDA
20.65
Market Cap
$3.42T
Profitability
Profit margins and return metrics
Profit Margin
35.71%
Operating Margin
48.87%
Gross Margin
68.76%
ROE
32.24%
ROA
14.66%
Growth
Revenue and earnings growth rates
Revenue Growth
+18.4%
Earnings Growth
+12.7%
Q/Q Revenue Growth
N/A
Q/Q Earnings Growth
+12.5%
Financial Health
Balance sheet strength and liquidity metrics
Debt/Equity
0.33
Low debt
Current Ratio
1.4
Good
Quick Ratio
1.25
Good
Cash/Share
$13.72
Quarterly Earnings History
EPS performance vs analyst estimates
2026-01-28
$N/A
2025-10-29
$3.72
+1.6% surprise
2025-07-30
$3.65
+8.1% surprise
2025-04-30
$3.46
+7.4% surprise
Technology Sector Comparison
Comparing MSFT against 149 companies in the Technology sector
(10 bullish, 66 neutral, 73 bearish)
P/E Ratio
32.68
This Stock
vs
90.97
Sector Avg
-64.1%
(Discount)
Return on Equity (ROE)
32.24%
This Stock
vs
-8.13%
Sector Avg
-496.6%
(Below Avg)
Profit Margin
35.71%
This Stock
vs
-7.75%
Sector Avg
-560.5%
(Weaker)
Debt to Equity
0.33
This Stock
vs
0.76
Sector Avg
-56.6%
(Less Debt)
Revenue Growth
18.4%
This Stock
vs
56.87%
Sector Avg
-67.6%
(Slower)
Current Ratio
1.4
This Stock
vs
3.33
Sector Avg
-58.0%
(Weaker)
Similar Companies
Peer comparison within the same industry
| Company | AI Rating | Market Cap | P/E | ROE | Profit Margin | Price | |
|---|---|---|---|---|---|---|---|
|
MSFT
Microsoft Corporation
|
BULLISH | $3.42T | 32.68 | 32.2% | 35.7% | $459.86 | |
|
AAPL
Apple Inc.
|
BULLISH | $3.68T | 31.66 | 152.0% | 27.0% | $250.12 | |
|
NVDA
NVIDIA Corporation
|
BULLISH | $4.53T | 46.1 | 107.4% | 53.0% | $186.23 | |
|
AVGO
Broadcom Inc.
|
NEUTRAL | $1.52T | 68.1 | 31.0% | 36.2% | $320.05 | |
|
ASML
ASML Holding N.V.
|
NEUTRAL | $569.58B | 49.74 | 50.5% | 29.4% | $1450.56 |
Recent Insider Trading
Insider buy and sell transactions from the last 6 months
| Date | Insider | Position | Transaction | Shares | Value |
|---|---|---|---|---|---|
| 2025-12-10 | HOGAN KATHLEEN T | Officer | Gift | 150 | - |
| 2025-12-04 | NUMOTO TAKESHI | Officer | Sale | 2,850 | $1,364,352 |
| 2025-12-04 | SCHARF CHARLES W | Director | Stock Award | 130 | - |
| 2025-12-04 | STANTON JOHN W. | Director | Stock Award | 130 | - |
| 2025-12-04 | LIST TERI | Director | Stock Award | 130 | - |
| 2025-12-04 | MASON MARK A.L. | Director | Stock Award | 130 | - |
| 2025-12-02 | ALTHOFF JUDSON | Officer | Sale | 12,750 | $6,266,829 |
| 2025-11-20 | ALTHOFF JUDSON | Officer | Gift | 3,463 | - |
| 2025-11-10 | NADELLA SATYA | Chief Executive Officer | Gift | 3,977 | - |
| 2025-11-06 | SMITH BRADFORD LEE | President | Gift | 10,000 | - |
| 2025-11-03 | SMITH BRADFORD LEE | President | Sale | 38,500 | $19,967,707 |
| 2025-09-15 | SMITH BRADFORD LEE | President | Stock Award | 26,151 | - |
| 2025-09-15 | ALTHOFF JUDSON | Officer | Stock Award | 26,151 | - |
| 2025-09-15 | NUMOTO TAKESHI | Officer | Stock Award | 11,583 | - |
| 2025-09-15 | COLEMAN AMY | Officer | Stock Award | 4,022 | - |
Insider transactions can signal confidence or concerns about company prospects
Wall Street Analysts
Professional analyst ratings and price targets
Consensus
STRONG_BUY
53 analysts
Barclays
2026-01-12
Overweight
Overweight
Wells Fargo
2026-01-08
Overweight
Overweight
Wedbush
2025-12-22
Outperform
Outperform
DA Davidson
2025-12-04
Buy
Buy
Rothschild & Co
2025-11-18
Buy
Neutral
Baird
2025-11-14
Outperform
JP Morgan
2025-10-30
Overweight
Overweight
Citigroup
2025-10-30
Buy
Buy
Bernstein
2025-10-30
Outperform
Outperform
Evercore ISI Group
2025-10-30
Outperform
Outperform
Past News Coverage
Recent headlines mentioning MSFT from our newsroom.
Newest → oldest
No matching news yet.