MSFT — Microsoft Corporation

Generated 2026-06-10 20:17

Quarterly Verdict

🟢 74/100

Worth buying

Quality grade C; 4 improving / 2 weakening metrics this quarter.

➕ Pricing power (gross margin): Gross margin 68% — wide margins, likely pricing power
➖ Free cash flow yield: FCF yield 1.3% — low
➕ Leverage (net debt / EBITDA): Net debt / EBITDA 0.3x — low leverage
➕ Recurring revenue: ~85% recurring — highly recurring
➕ Revenue +2.0% vs last quarter
➖ Net income -17.4% vs last quarter
➖ Operating margin -0.8 pts vs last quarter
➕ Free cash flow +168.7% vs last quarter
➕ Cash +32.1% vs last quarter
➕ Debt -1.1% vs last quarter

Heuristic from the Quality Scorecard + quarter-over-quarter trends. Not financial advice.

Valuation

DCF — our estimate (15% growth, 9% discount)
UndervaluedFairOvervalued
Intrinsic $125.69 · Price $397.36 · -216% margin of safety
Analyst consensus
UndervaluedFairOvervalued
Target $560.95 · Price $397.36 · +29% margin of safety · 55 analysts · range $400.00–$870.00

Within circle of competence — our DCF shown alongside analyst targets. Not financial advice.

Key Trends (6-yr)

GAAP EPS
Sales
Shares Outstanding

Quality Scorecard

C64/100
Pricing power (gross margin) 68% Gross margin 68% — wide margins, likely pricing power
Free cash flow yield 1.3% FCF yield 1.3% — low
Leverage (net debt / EBITDA) 0.3x Net debt / EBITDA 0.3x — low leverage
🟡 Non-cyclical (beta) 1.10 Beta 1.10 — moderately cyclical
Recurring revenue 85% ~85% recurring — highly recurring
🟡 Returns capital to shareholders yes dividend ~90.0%; shares -0.1%/yr
🟡 Buyback efficiency (net share-count Δ) -0.1%/yr Shares outstanding -0.1% YoY — roughly flat

Compounder checklist (proxy metrics from yfinance). 7 of 7 criteria scored. Not financial advice.

Company Overview

Basic Information

Company Name: Microsoft Corporation
Symbol: MSFT
Exchange: NMS
Sector: Technology
Industry: Software - Infrastructure

Company Details

Country: United States
City: Redmond
Employees: 228,000
Market Cap: $2.95T

Business Description

Microsoft Corporation develops and supports software, services, devices, and solutions worldwide. The Productivity and Business Processes segment offers Microsoft 365 commercial, enterprise mobility + security, windows commercial, power BI, exchange, sharepoint, Microsoft teams, security and compliance, and copilot; Microsoft 365 commercial products, such as Windows commercial on-premises and office licensed services; Microsoft 365 consumer products and cloud services, including Microsoft 365 consumer subscriptions, office licensed on-premises, and other consumer services; LinkedIn; dynamics products and cloud services, such as dynamics 365, cloud-based applications, and on-premises ERP and CRM applications. Its Intelligent Cloud segment provides Server products and cloud services comprising Azure and other cloud services, GitHub, Nuance Healthcare, virtual desktop offerings, and other cloud services; server products, including SQL and windows server, visual studio and system center related client access licenses, and other on-premises offerings; enterprise and partner services, such as enterprise support and nuance professional services, industry solutions, Microsoft partner network, and learning experience. The Personal Computing segment provides windows and devices, such as Windows OEM licensing and devices and surface and PC accessories; gaming services and solutions, such as Xbox hardware, content, and services, first- and third-party content Xbox game pass, subscriptions, and cloud gaming, advertising, and other cloud services; search and news advertising services that includes Bing and Copilot, Microsoft News and Edge, and third-party affiliates. It sells its products through OEMs, distributors, and resellers; and online and retail stores. The company has a strategic collaboration with Mayo Clinic, Inc. for the development of a frontier AI model for healthcare. The company was founded in 1975 and is headquartered in Redmond, Washington.

Key Metrics

Price & Valuation

Current Price
$397.36
Market Cap
$2.95T
P/E Ratio
23.68
Forward P/E
20.54
PEG Ratio
1.27
Price to Book
7.12

Profitability

Profit Margin: 39.34%
Operating Margin: 46.33%
Gross Margin: 68.31%
Return on Equity (ROE): 34.01%
Return on Assets (ROA): 14.81%
Revenue Growth: 18.30%

Financial Health

Current Ratio: 1.28
Quick Ratio: 1.14
Debt to Equity: 30.27
Total Debt: $125.43B
Total Cash: $78.23B
Beta: 1.10

Trading & Analyst Info

52-Week Range

52-Week High: $555.45
52-Week Low: $356.28
50-Day Average: $409.27
200-Day Average: $455.91

Analyst Recommendations

Recommendation: STRONG_BUY
Target Mean Price: $560.95
Target High: $870.00
Target Low: $400.00

Price History

Financial Statements

Income Statement (Annual)

Item2025-06-302024-06-302023-06-302022-06-30
Tax Effect Of Unusual Items$-77.09M$-99.92M$-2.85M$43.75M
Tax Rate For Calcs$0.18$0.18$0.19$0.13
Normalized EBITDA$160.60B$133.56B$105.16B$99.91B
Total Unusual Items$-438.00M$-549.00M$-15.00M$334.00M
Total Unusual Items Excluding Goodwill$-438.00M$-549.00M$-15.00M$334.00M
Net Income From Continuing Operation Net Minority Interest$101.83B$88.14B$72.36B$72.74B
Reconciled Depreciation$34.15B$22.29B$13.86B$14.46B
Reconciled Cost Of Revenue$87.83B$74.11B$65.86B$62.65B
EBITDA$160.16B$133.01B$105.14B$100.24B
EBIT$126.01B$110.72B$91.28B$85.78B
Net Interest Income$262.00M$222.00M$1.03B$31.00M
Interest Expense$2.38B$2.94B$1.97B$2.06B
Interest Income$2.65B$3.16B$2.99B$2.09B
Normalized Income$102.19B$88.59B$72.37B$72.45B
Net Income From Continuing And Discontinued Operation$101.83B$88.14B$72.36B$72.74B

Showing 15 of 47 rows

Balance Sheet (Annual)

Item2025-06-302024-06-302023-06-302022-06-302021-06-30
Ordinary Shares Number$7.43B$7.43B$7.43B$7.46BN/A
Share Issued$7.43B$7.43B$7.43B$7.46BN/A
Net Debt$12.91B$33.31B$12.53B$35.85BN/A
Total Debt$60.59B$67.13B$59.97B$61.27BN/A
Tangible Book Value$201.37B$121.66B$128.97B$87.72BN/A
Invested Capital$386.63B$320.11B$253.46B$216.32BN/A
Working Capital$49.91B$34.45B$80.11B$74.60BN/A
Net Tangible Assets$201.37B$121.66B$128.97B$87.72BN/A
Capital Lease Obligations$17.44B$15.50B$12.73B$11.49BN/A
Common Stock Equity$343.48B$268.48B$206.22B$166.54BN/A
Total Capitalization$383.63B$311.17B$248.21B$213.57BN/A
Total Equity Gross Minority Interest$343.48B$268.48B$206.22B$166.54BN/A
Stockholders Equity$343.48B$268.48B$206.22B$166.54BN/A
Gains Losses Not Affecting Retained Earnings$-3.35B$-5.59B$-6.34B$-4.68BN/A
Other Equity Adjustments$-3.35B$-5.59B$-6.34B$-4.68BN/A

Showing 15 of 78 rows

Cash Flow Statement (Annual)

Item2025-06-302024-06-302023-06-302022-06-302021-06-30
Free Cash Flow$71.61B$74.07B$59.48B$65.15BN/A
Repurchase Of Capital Stock$-18.42B$-17.25B$-22.25B$-32.70BN/A
Repayment Of Debt$-3.22B$-29.07B$-2.75B$-9.02BN/A
Issuance Of Debt$0.00$24.39B$0.00$0.00N/A
Issuance Of Capital Stock$2.06B$2.00B$1.87B$1.84BN/A
Capital Expenditure$-64.55B$-44.48B$-28.11B$-23.89BN/A
End Cash Position$30.24B$18.32B$34.70B$13.93BN/A
Beginning Cash Position$18.32B$34.70B$13.93B$14.22BN/A
Effect Of Exchange Rate Changes$63.00M$-210.00M$-194.00M$-141.00MN/A
Changes In Cash$11.86B$-16.18B$20.97B$-152.00MN/A
Financing Cash Flow$-51.70B$-37.76B$-43.94B$-58.88BN/A
Cash Flow From Continuing Financing Activities$-51.70B$-37.76B$-43.94B$-58.88BN/A
Net Other Financing Charges$-2.29B$-1.31B$-1.01B$-863.00MN/A
Cash Dividends Paid$-24.08B$-21.77B$-19.80B$-18.14BN/A
Common Stock Dividend Paid$-24.08B$-21.77B$-19.80B$-18.14BN/A

Showing 15 of 59 rows

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