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Microsoft Corp

MSFT

Services-Prepackaged Software

Mkt Cap

$3.137T

PE

38.00

Debt

$55.8B

Cash

$17.31B

EV

$3.175T

FCF

$67.45B

Market Cap

$3.137T

P/E Ratio

38.00

Debt

$55.8B

Cash

$17.31B

EV

$3.175T

FCF

$67.45B
Charts data: {"Earnings":[{"time":"2014-06-29","value":22074000000},{"time":"2015-06-29","value":12193000000},{"time":"2016-06-29","value":16798000000},{"time":"2017-06-29","value":21204000000},{"time":"2018-06-29","value":16571000000},{"time":"2019-06-29","value":39240000000},{"time":"2020-06-29","value":44281000000},{"time":"2021-06-29","value":61271000000},{"time":"2022-06-29","value":72738000000},{"time":"2023-06-29","value":72361000000}],"Sales":[{"time":"2014-06-29","value":86833000000},{"time":"2015-06-29","value":93580000000},{"time":"2016-06-29","value":91154000000},{"time":"2017-06-29","value":96571000000},{"time":"2018-06-29","value":110360000000},{"time":"2019-06-29","value":125843000000},{"time":"2020-06-29","value":143015000000},{"time":"2021-06-29","value":168088000000},{"time":"2022-06-29","value":198270000000},{"time":"2023-06-29","value":211915000000}],"Net Margins":[{"time":"2014-06-29","value":0.2542121082998399},{"time":"2015-06-29","value":0.13029493481513144},{"time":"2016-06-29","value":0.18428154551637888},{"time":"2017-06-29","value":0.2195690217560137},{"time":"2018-06-29","value":0.1501540413193186},{"time":"2019-06-29","value":0.3118171054409065},{"time":"2020-06-29","value":0.3096248645247002},{"time":"2021-06-29","value":0.36451739564989766},{"time":"2022-06-29","value":0.3668633681343622},{"time":"2023-06-29","value":0.3414623787839464}],"Assets":[{"time":"2014-06-29","value":172384000000},{"time":"2015-06-29","value":176223000000},{"time":"2016-06-29","value":193694000000},{"time":"2017-06-29","value":241086000000},{"time":"2018-06-29","value":258848000000},{"time":"2019-06-29","value":286556000000},{"time":"2020-06-29","value":301311000000},{"time":"2021-06-29","value":333779000000},{"time":"2022-06-29","value":364840000000},{"time":"2023-06-29","value":411976000000}],"Stockholders Equity":[{"time":"2014-06-29","value":89784000000},{"time":"2015-06-29","value":80083000000},{"time":"2016-06-29","value":71997000000},{"time":"2017-06-29","value":72394000000},{"time":"2018-06-29","value":82718000000},{"time":"2019-06-29","value":102330000000},{"time":"2020-06-29","value":118304000000},{"time":"2021-06-29","value":141988000000},{"time":"2022-06-29","value":166542000000},{"time":"2023-06-29","value":206223000000}],"ROE":[{"time":"2014-06-29","value":0.24585672280139},{"time":"2015-06-29","value":0.15225453591898405},{"time":"2016-06-29","value":0.23331527702543162},{"time":"2017-06-29","value":0.2928972014255325},{"time":"2018-06-29","value":0.20033124591987234},{"time":"2019-06-29","value":0.3834652594547054},{"time":"2020-06-29","value":0.37429841763592103},{"time":"2021-06-29","value":0.4315223821731414},{"time":"2022-06-29","value":0.4367546925099975},{"time":"2023-06-29","value":0.35088714643856406}],"ROA":[{"time":"2014-06-29","value":0.1648470855763876},{"time":"2015-06-29","value":0.10945222814275095},{"time":"2016-06-29","value":0.10838745650355716},{"time":"2017-06-29","value":0.10523630571663224},{"time":"2018-06-29","value":0.15146727036716529},{"time":"2019-06-29","value":0.16183224221443626},{"time":"2020-06-29","value":0.18461655897063167},{"time":"2021-06-29","value":0.2200497934261892},{"time":"2022-06-29","value":0.22945948909110844},{"time":"2023-06-29","value":0.2167869002077791}]}

Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment offers Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Microsoft Viva, and Skype for Business; Skype, Outlook.com, OneDrive, and LinkedIn; and Dynamics 365, a set of cloud-based and on-premises business solutions for organizations and enterprise divisions. The Intelligent Cloud segment licenses SQL, Windows Servers, Visual Studio, System Center, and related Client Access Licenses; GitHub that provides a collaboration platform and code hosting service for developers; Nuance provides healthcare and enterprise AI solutions; and Azure, a cloud platform. It also offers enterprise support, Microsoft consulting, and nuance professional services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions; and training and certification on Microsoft products. The More Personal Computing segment provides Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, such as volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; and Windows Internet of Things. It also offers Surface, PC accessories, PCs, tablets, gaming and entertainment consoles, and other devices; Gaming, including Xbox hardware, and Xbox content and services; video games and third-party video game royalties; and Search, including Bing and Microsoft advertising. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online stores, and retail stores. Microsoft Corporation was founded in 1975 and is headquartered in Redmond, Washington.

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Growth

%

%

Discount

%

%

Multiple

g\r+10%+11%+12%+13%+14%
0%109887
+1%1110988
+2%13111098
+3%141311109
+4%1714121110
Years012345678910TV
FCF$67.45B$77.3B$87.77B$98.72B$110B$121.4B$132.6B$143.5B$153.7B$163.1B$171.2B$1.712T
DCF$67.22B$66.37B$64.91B$62.88B$60.34B$57.33B$53.94B$50.25B$46.35B$42.32B$423.2B
Value$995.1B

In the chart Earnings are multiplied by this value.

Earnings Growth 30%
Earnings Stability 91%


Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years06-201506-201606-201706-201806-201906-202006-202106-202206-2023TTM
Net Margin13%18%22%15%31%31%36%37%34%36%
ROA11%11%11%15%16%18%22%23%22%22%
ROE15%23%29%20%38%37%43%44%35%35%

What is the average Net Margin?

The average Net Margin over the past 5 years is +30.74%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +3.36%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +19.4%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.61%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +36.29%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +2.77%.


Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years06-201506-201606-201706-201806-201906-202006-202106-202206-2023TTM
Debt FCF1.532.152.752.492.051.571.280.890.980.83
Debt Equity0.440.751.190.970.770.600.510.350.280.23
MIN
Graham Stability--100%99%100%100%100%100%100%99%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 0.83.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.32.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.99.


Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years06-201606-201806-202006-2022Trend
Revenue13%14%14%6.9%1.3%
Net Income23%34%18%-0.52%3%
Stockholders Equity16%20%20%24%4.3%
FCF13%13%9.6%-8.7%0.93%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +13.94%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.34%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +34.29%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +2.98%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +20.05%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +4.35%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +13.02%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +0.93%.