Microsoft Stock Analysis (NASDAQ:MSFT)
Microsoft Analysis Video
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.