Microsoft Corporation(MSFT) - Stock detail

Microsoft Corporation

US
MSFT
Microsoft Corporation(Listing date: 03/13/1986)

Microsoft Corporation was founded on April 4, 1975. The company develops and supports software, services, devices, and solutions to deliver new value to customers and help people and businesses realize their full potential. It offers a range of services, including cloud-based solutions that provide customers with software, services, platforms, and content, as well as solution support and consulting services. The company also delivers relevant online advertising to a global audience. Its products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. The company also designs, manufactures, and sells devices, including personal computers, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories.

AI Value AnalystHold
Overall Rating7/10
Generated at:2026-03-04 16:36:52
Analysis based on 5 financial reports covering periods: 2025-12-31, 2025-09-30, 2025-06-30, 2025-03-31, and 2024-12-31. Data includes quarterly financial statements, valuation metrics, and profitability indicators. Complete financial data available for comprehensive analysis.
Overview

Microsoft Corporation demonstrates strong fundamental conditions with robust financial health, exceptional profitability, and dominant market position in cloud/AI technologies, though current valuation multiples limit near-term upside potential.

Valuation
4/10
Profitability
9/10
Financial health
8/10
Operation Advice
  • Hold position with price targets of $420-$440 short-term (3-6 months) and $450-$470 medium-term (6-12 months).
  • Monitor Q3 earnings for growth sustainability and implement tight stop-loss at $390 (3.7% downside) based on historical maximum adverse excursion.

Valuation

P/E TTM
24.98
P/E LYR
31.61
P/B MRQ
7.62
P/S TTM
--
AI Analysis
  • Microsoft trades at premium valuations with forward PE of 31.61 and TTM PE of 24.98, justified by growth trajectory but limiting near-term upside. Base case target price range is $440-$460 (8-13% upside) assuming 20% EPS growth.
  • Forward PE (31.61) and TTM PE (24.98) are above historical averages but justified by growth trajectory
  • PB Ratio of 7.62 reflects intangible assets (software IP) and high ROE
  • PS Ratio of 19.07 indicates market confidence in revenue scalability
  • Base Case (12-month) target price: $440-$460 (8-13% upside), assuming 20% EPS growth and PE ~27-28x
  • Bull Case target price: $480-$500 (18-23% upside), driven by AI monetization and cloud acceleration
  • Bear Case target price: $380-$400 (6% downside to flat), if macro conditions weaken
  • Industry peers trade at similar premiums
Valuation trend

Profitability

ROE TTM
18.03%
Net margin
41.65%
Gross margin
68.53%
Total revenue
158.95B
AI Analysis
  • Microsoft exhibits exceptional profitability with high ROE/ROA, stable margins, and strong earnings growth driven by cloud expansion and AI adoption.
  • ROE (18.03%) and ROA (10.31%) reflect efficient capital utilization and market dominance
  • Gross margins ~69% and net margins ~36-42% indicate pricing power and cost control
  • Q2 diluted EPS surged 35.74% YoY to $8.87, driven by cloud expansion and AI adoption
  • Revenue diversification with recurring revenue from subscriptions (Microsoft 365, Azure) ensures stable cash flows
  • Consistent double-digit revenue growth across quarters highlights strong demand for cloud and software services
  • High net margins (41.65% in Q2) support reinvestment capacity and shareholder returns
Profitability
2024Q42025Q12025Q22025Q32025Q4
ROE TTM--25.27%33.28%7.85%18.03%
Earnings
2024Q42025Q12025Q22025Q32025Q4
Total revenue135.22B205.28B281.72B77.67B158.95B

Financial health

Debt/Asset
41.25%
Current ratio
1.39
Quick ratio
1.38
Cash ratio
1.38
AI Analysis
  • Microsoft demonstrates robust financial health with adequate liquidity, moderate leverage, consistent revenue growth, and strong profit retention capabilities.
  • Current ratio (1.39) and quick ratio (1.38) indicate adequate short-term liquidity, reflecting efficient capital management
  • Debt-to-equity (41.25%) is moderate for a tech company, balancing growth investments with financial stability
  • Consistent double-digit revenue growth across quarters (latest Q2: +17.55% YoY) highlights strong demand
  • High net margins (41.65% in Q2) support reinvestment capacity and shareholder returns
  • Robust financial health with efficient capital management and stable growth patterns
Leverage
2024Q42025Q12025Q22025Q32025Q4
Debt/Asset43.30%42.79%44.51%42.94%41.25%
Liquidity
2024Q42025Q12025Q22025Q32025Q4
Current ratio1.351.371.351.401.39