Microsoft Stock Analysis, Valuation (NASDAQ:MSFT)

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$92 $0.66 (0.71%) MSFT stock closing price Feb 16, 2018 (Closing)
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Microsoft
Updated on : Feb 16, 2018
previous close
MSFT 92 (0%)
NASDAQ 7239.5 (0%)
Closing Price On: Feb 16, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Computer-Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2018-Q2
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
27.6%
Sector Average:
5.3%
5 Quarter Net Profit
Net Margins
2018-Q2
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
94.9B
Debt/Equity Ratio:
 1.21
Compared to the industry
Cash Flow
Operating cash flow:
$7.88B
Net Income:
-$6.3B
Dividend Yield
MSFT dividend yield:
1.73%
PROS      CONS
Operating Margins
Net Margins
ROIC
ROE
FCF Margin
High Debt Burden
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
MSFT PS :
7.2
Industry PS :
2.8
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
21.2%
Return on Equity:
15.3%
Free Cash Flow Margin:
18.3%
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Microsoft Stock Analysis

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Take a look at Amigobulls Microsoft stock analysis video. Our analyst opinion covering the buy and sell arguments for MSFT stock is shown in the video.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Microsoft Corporation Stock Rating 3.9/5

We at Amigobulls use various financial measures including profit margins, revenue growth and dividends for MSFT stock analysis. Microsoft valuation forms a crucial part of our stock analysis. Based on a company's historical fundamentals we arrive at Microsoft stock rating which is indicative of the company's financial performance.

Should you buy MSFT stock?

  • Microsoft had a healthy average operating margin of 27.6% over the last 4 quarters.
  • Net margins came in at average 11.7% for Microsoft over the last twelve months.
  • Microsoft generates a high return on invested capital of 21.2%.
  • Microsoft has a good Return On Equity (ROE) of 15.3%.
  • Microsoft has a healthy FCF (Free Cash Flow) margin of 18.3%.

Should you sell MSFT stock?

  • Microsoft is debt laden and has a high debt/equity ratio of  1.21.
  • MSFT stock is trading at a PS multiple of 7.2, which is a negative when compared to the Computer-Software industry average multiple of 2.8.

Comments on this video and Microsoft stock

Investors can make use of the Amigobulls Microsoft stock analysis to ascertain how MSFT stock fares in fundamental analysis investment criteria. Company's fundamentals remain one of the key driver of MSFT stock and helps investors in making good buy and sell decision.

While doing a study of the company financials, Microsoft revenue growth and profit or net income are two main metrics which help in identifying whether MSFT stock is overvalued or undervalued. Investors could make use of MSFT technical analysis to check whether the fundamental story is reflected in the market sentiment.