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Company Analysis

Microsoft Corporation MSFT

A comprehensive view of key metrics, scores, and financial health for Microsoft Corporation

Overview of Microsoft Corporation

MSFT NMS
Technology Software - Infrastructure Framework: Software & SaaS Mega Cap
Microsoft Corporation (MSFT), is a Mega Cap company, in the Software - Infrastructure industry, last closed at $390.74, about 53.7% overvalued vs fair value, -18.4% 1Y return, placing in the top 10% of its sector.
Metrics P/E 36.5× Rev Growth 14.9% ROE 33.3% Gross Margin 68.8% Div Yield 0.65%
USD 390.74
0.10%
(Delayed)
• Vol 90d: 30.6%
52-Week Range
Market Cap
$2.90T
Enterprise Value
$2.92T
Overall Score
View breakdown
Overall
Growth
Fair
Profitability
Good
Health
Fair
Efficiency
Weak
Valuation
Good
Growth
Fair
Profitability
Good
Health
Fair
Efficiency
Weak
Valuation
Good
Completeness: 82%
Confidence: 90%
Updated: Mar 8
Top Beats
No strong beats yet

Quick Facts

Website https://www.microsoft.com
HQ Redmond, WA
Employees 228,000
Fiscal year Jun 30

Next Events

Earnings Jul 29 Estimated
Dividend Aug 20

Fair Value Snapshot

Bear Base Bull
$167
$181
$197
Current: $390.74 -54% vs base

Engine Room Money Flow™

Mega Cap

Software & SaaS - Where revenue goes and how value is created

Flow Steps
Total Revenue
$281.7B
14.9%%
Gross Profit
$193.9B
13.4%%
Operating Income (GAAP)
$128.5B
17.4%%
Operating Cash Flow
$136.2B
14.9%%
Free Cash Flow
$71.6B
-3.3%%
Capital Allocation
$-42.5B
Money Flow Bridge
Flow Direction: Money moves from left to right
Components: Breakdown shows composition of each stage
Industry-Specific: Software & SaaS

Quality & Reliability Indicators

Gross Margin
68.8%
Good

Gross Profit / Revenue — pricing power and product moat (SaaS benchmark: >70%)

FCF Margin
25.4%
Excellent

Free Cash Flow / Revenue — primary investor metric for software companies

Rule of 40
40.4
Good

Revenue Growth (%) + FCF Margin (%) — SaaS health score: ≥40 healthy, ≥60 elite

SBC % of Revenue
4.3%
Excellent

Stock-Based Compensation / Revenue — real dilution cost excluded from GAAP FCF; 5–15% typical for growth SaaS

R&D Intensity
11.5%
Good

R&D Expense / Revenue — growth investment intensity (10–25% typical for SaaS)

Operating Margin (GAAP)
45.6%
Excellent

Operating Income / Revenue — GAAP profitability; negative is common for high-growth SaaS

FCF Yield
2.5%
Fair

Free Cash Flow / Market Cap — investor return potential

Owner's Pocket - Capital Allocation

Total Returned to Shareholders

Combined dividends, buybacks, and debt reduction

$42.5B
59.4% of FCF
Dividends
$24.1B
% of FCF 33.6%
Buybacks
$18.4B
% of FCF 25.7%

Where It Leaks

Cash Flow Health some concerns
Moderate efficiency issues detected. Review active leaks below for improvement areas.
1
Active Leaks
0/1
Improving
1
High Impact
0
Critical
Key Insights

Key concerns identified: CapEx Hunger

Moat Analysis Software & SaaS Specialized

Competitive Advantage Assessment

Evaluating Microsoft Corporation's durable competitive advantages across 6 defense dimensions

Overall Moat Strength
75
/100
Moderate
Scores based on quantitative metrics and qualitative factors

Click labels to expand details

Pricing Power

Strong
86

Ability to sustain premium gross margins and defend profitability against competition

KEY SIGNALS
Gross Margin Quality Margin Durability
STRENGTHS
  • Premium Software Margins Gross margin quality is strong versus peers (score 0.81), consistent with premium software economics.
  • Margins Hold Through Cycles Margin durability is strong (score 0.92), pointing to resilient pricing power.

Trade-Off Ledger™

Where management spends the performance budget - Growth, Profitability, or Safety

Software SaaS vs Industry Peers 91% Coverage
Trade-Off Triangle Visualization A ternary plot showing MSFT's balance between Growth (30.2%), Profitability (41.3%), and Safety (28.5%). Growth 30% Safety 29% Profitability 41%

Click axes to expand details. Marker shows current allocation.

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Growth

59th percentile vs peers
60
Key Signals
Rev Growth YoY 14.9% 66p Revenue CAGR 3Y 12.4% 53p TSR 22.2% 67p EPS Growth YoY 15.6% 44p
Strengths
  • Rule of 40 in top 20% of peers (40.4%, 80th percentile)
  • FCF Margin in top 20% of peers (25.4%, 84th percentile)
  • Interest Coverage Ratio in top 20% of peers (52.84, 90th percentile)
  • Superior capital returns - 2 return metrics above peer median
Risks

No significant risks identified for this axis.

Two Futures

Scenario-based fair value ranges for Microsoft Corporation.

User assumptions applied -
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Unable to Compute Fair Value

This company cannot be valued using standard models.

What this means: The Scenario Theatre requires financial data (revenue, cash flow, shares outstanding) to calculate fair value estimates. This data may be unavailable for:

  • Recently listed companies (IPOs, SPACs)
  • Shell companies or holding companies
  • Companies that haven't filed recent financials
  • Foreign companies with limited data coverage
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