Microsoft Stock Analysis (NASDAQ:MSFT)

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$62.53 $0.17 (0.27%) MSFT stock closing price Jan 17, 2017 (Closing)
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Microsoft
Updated on : Jan 17, 2017
previous close
MSFT 62.5 (0%)
NASDAQ 5538.7 (0%)
Closing Price On: Jan 17, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Computer-Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q1
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
3.7%
Operating Profit
Operating Margin:
23%
Sector Average:
4.8%
5 Quarter Net Profit
Net Margins
2017-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
74.69B
Debt/Equity Ratio:
 1.06
Compared to the industry
Cash Flow
Operating cash flow:
$11.55B
Net Income:
$4.69B
Dividend Yield
MSFT dividend yield:
2.3%
PROS      CONS
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
FCF Margin
Recent Growth
Long Term Growth
High Debt Burden
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
MSFT PS :
5.7
Industry PS :
2.4
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
60.2%
Return on Equity:
22.3%
Free Cash Flow Margin:
45.9%
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Microsoft Analysis Video

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View Microsoft stock analysis video. This is our MSFT analyst opinion covering the buy and sell arguments for MSFT stock.

Microsoft Corporation Stock Rating (4/5)

Our Microsoft stock opinion is based on fundamentals of the company. This Microsoft stock analysis is based on latest Q1 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy MSFT stock?

  • Microsoft had a healthy average operating margin of 23% over the last 4 quarters.
  • LTM Net margins were good at 19.4% for Microsoft.
  • The operating cash flow looks good at 2.5 times the net income.
  • The Microsoft stock currently trades at a price to earnings ratio of 21.9. We rate this as a positive, compared to the industry average of 25.5.
  • Microsoft generates a high return on invested capital of 60.2%.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Microsoft at 22.3%.
  • Microsoft has a healthy FCF (Free Cash Flow) margin of 45.9%.

Should you sell MSFT stock?

  • 2017 Q1 revenue growth of 0.4% YoY was meagre.
  • Long term revenue growth of over the past 5 years has been disappointing.
  • Microsoft is debt laden and has a high debt/equity ratio of  1.06.
  • MSFT stock is trading at a PS multiple of 5.7, which is a negative when compared to the Computer-Software industry average multiple of 2.4.

Comments on this video and Microsoft stock

Mike-Zaman on Microsoft stock analysis ($43.34)
bullish
Keep a close eye on Microsoft Corporation (MSFT), which reported third quarter fiscal 2015 profit and revenue numbers that exceeded Wall Street estimates

Read more at Mike Zaman website http://mikezaman.com/33784/stocks/gigamo...
reply