Microsoft Stock Valuation

MSFT
 Stock
  

USD 248.72  6.30  2.47%   

What would the acquisition value of Microsoft be today? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Microsoft, is its stock price multiplied by the total number of shares outstanding, calculating Microsoft's enterprise value requires a different approach. It uses Microsoft's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
Enterprise Value is likely to gain to about 2025.6 B in 2022, whereas Free Cash Flow is likely to drop slightly above 55.2 B in 2022.
Microsoft secures a last-minute Real Value of $300.95 per share. The latest price of the firm is $248.72. At this time, the firm appears to be undervalued. Our model forecasts the value of Microsoft from analyzing the firm fundamentals such as Return On Equity of 0.43 %, profit margin of 0.34 %, and Current Valuation of 1854.08 B as well as examining its technical indicators and Probability Of Bankruptcy. In general, we recommend acquiring undervalued stocks and selling overvalued stocks since, at some point, asset prices and their ongoing real values will merge together.
  
Microsoft Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Microsoft's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.

Microsoft Most Recent Valuation Data

Dividend Share
2.54
Beta
0.92
change Receivables
-6.8 B
Fiscal Year End
June
property Plant And Equipment Net
87.5 B
Enterprise Value
1854.1 B
Undervalued
Today 248.72
Please note that Microsoft's price fluctuation is very steady at this time. Calculation of the real value of Microsoft is based on 3 months time horizon. Increasing Microsoft's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Microsoft is useful when determining the fair value of the Microsoft stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Microsoft. Since Microsoft is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Microsoft Stock. However, Microsoft's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
224.17
Downside
300.95
Real Value
303.52
Upside
Estimating the potential upside or downside of Microsoft helps investors to forecast how Microsoft stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Microsoft more accurately as focusing exclusively on Microsoft's fundamentals will not take into account other important factors:
Earnings
Estimates (11)
LowProjected EPSHigh
8.859.139.52
Details
Hype
Prediction
LowEstimated ValueHigh
246.71249.28251.85
Details
23 Analysts
Consensus
LowTarget PriceHigh
236.60355.32410.00
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Microsoft's intrinsic value based on its ongoing forecasts of Microsoft's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Microsoft's closest peers. When choosing an evaluation method for Microsoft, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Microsoft Investments

6.85 Billion

Microsoft Valuation Drivers Correlation

Many accounts on the financial statements of Microsoft are highly interrelated and sometimes correlated. Consequently, when conducting Microsoft's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Microsoft
Click cells to compare fundamentals

Microsoft Valuation Trend

Knowing Microsoft's actual value is paramount for traders to make sound investment determinations. Microsoft's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Microsoft's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Microsoft's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Microsoft Market Cap

Microsoft is considered to be number one stock in market capitalization category among related companies. Market capitalization of Information Technology industry is now estimated at about 1.91 Trillion. Microsoft totals roughly 1.9 Trillion in market capitalization claiming about 99% of equities under Information Technology industry.
Capitalization  Valuation  Total debt  Revenue  Workforce

Microsoft Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Microsoft's current stock value. Our valuation model uses many indicators to compare Microsoft value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Microsoft competition to find correlations between indicators driving Microsoft's intrinsic value. More Info.
Microsoft is regarded fifth in price to earning category among related companies. It is considered to be number one stock in price to sales category among related companies fabricating about  0.35  of Price to Sales per Price to Earning. The ratio of Price to Earning to Price to Sales for Microsoft is roughly  2.85 . Price to Sales Ratio is likely to drop to 8.94 in 2022. Comparative valuation analysis is a catch-all model that can be used if you cannot value Microsoft by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Microsoft's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Microsoft's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Microsoft's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Microsoft and how it compares across the competition.

About Microsoft Valuation

The stock valuation mechanism determines the current worth of Microsoft on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Microsoft. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Microsoft based exclusively on its fundamental and basic technical indicators. By analyzing Microsoft's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Microsoft's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Microsoft. We calculate exposure to Microsoft's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Microsoft's related companies.
Fiscal Year End
June
Industry
Software-Infrastructure
Concentration
Systems Software
Full Time Employees
221 K
Service Category
Software
Employer Id Number
91-1144442
Last ReportedProjected for 2022
Gross Profit135.6 B116.5 B
Profit Margin 36.69  30.52 
Microsoft's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Microsoft's value is low or high relative to the company's performance and growth projections. Determining the market value of Microsoft can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Microsoft represents a small ownership stake in the entity. As a stockholder of Microsoft, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Microsoft Dividends Analysis For Valuation

Dividend Yield is likely to gain to 0.0128 in 2022, whereas Payment of Dividends and Other Cash Distributions is likely to drop (19.6 B) in 2022. . Microsoft Accumulated Retained Earnings Deficit are comparatively stable at the moment as compared to the past year. Microsoft reported Accumulated Retained Earnings Deficit of 84.28 Billion in 2021. Earnings per Basic Share is likely to gain to 10.47 in 2022, whereas Earning Before Interest and Taxes EBIT is likely to drop slightly above 69.2 B in 2022.
Last ReportedProjected for 2022
Payment of Dividends and Other Cash Distributions-18.1 B-19.6 B
Dividend Yield 0.009  0.0128 
Dividends per Basic Common Share 2.42  2.16 
There are various types of dividends Microsoft can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Microsoft shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Microsoft directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Microsoft pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Microsoft by the value of the dividends paid out.

Microsoft Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Microsoft does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
DescriptionMicrosoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments Pr
Quarterly Earnings Growth Y O Y-0.133

Microsoft Current Valuation Indicators

Valuation refers to the process of determining the present value of Microsoft and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Microsoft we look at many different elements of the entity such as Microsoft's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Microsoft's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Microsoft's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Microsoft, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Microsoft's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Microsoft's worth.
Additionally, see Correlation Analysis. Note that the Microsoft information on this page should be used as a complementary analysis to other Microsoft's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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When running Microsoft price analysis, check to measure Microsoft's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Microsoft is operating at the current time. Most of Microsoft's value examination focuses on studying past and present price action to predict the probability of Microsoft's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Microsoft's price. Additionally, you may evaluate how the addition of Microsoft to your portfolios can decrease your overall portfolio volatility.
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Is Microsoft's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Microsoft. If investors know Microsoft will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Microsoft listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
(0.13) 
Market Capitalization
1901 B
Quarterly Revenue Growth YOY
0.11
Return On Assets
0.15
Return On Equity
0.43
The market value of Microsoft is measured differently than its book value, which is the value of Microsoft that is recorded on the company's balance sheet. Investors also form their own opinion of Microsoft's value that differs from its market value or its book value, called intrinsic value, which is Microsoft's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Microsoft's market value can be influenced by many factors that don't directly affect Microsoft's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Microsoft's value and its price as these two are different measures arrived at by different means. Investors typically determine Microsoft value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Microsoft's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.