MICROSOFT CORP

MSFT
About the company

Microsoft Corporation, a technology company, develops and supports a portfolio of technology solutions for individuals and businesses worldwide. Its products include operating systems, server applications, business solution applications, software development tools, desktop and server management tools, and video games; and devices, such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories.

Country: United StatesPrice: $509.22Market Cap: $3.78T

Investment snapshot

25%positive consensus
Scored 36d ago

Positive

4

BUY / PASS

Neutral / negative

7 / 4

NEUTRAL / FAIL

Median fair value

$216.95

-57.4% vs price

Models with upside

1 / 16

Positive margin of safety

Strongest signal

7 of 11 pass — Marks, Lynch, Schloss +1 more object

Key risk

No clean pass — all 12 investors flag at least one valuation criterion

Framework analysis

VerdictMeaning
BUYPositive purchase signal: the framework's buy requirements are met.
PASSThe company clears the framework's checklist or screen, but the framework does not produce a buy signal. For valuation frameworks this often means margin of safety is missing, insufficient, or unavailable; some screen-only frameworks have no intrinsic-value BUY state.
NEUTRALNeither a positive nor negative conclusion. It does not mean to hold an existing position.
FAILThe company does not clear the framework's requirements.
RankedRanked strategies do not use PASS: selected cohort is BUY, outside the cohort is FAIL, and unranked is NEUTRAL.
Scored from 10-K36d ago
MetricO'Shaughnessy

Systematic Factor Composite

Munger

Quality Focus

Marks

Risk-Aware Value

Buffett

Quality Compounder

Lynch

GARP

Pabrai

Dhandho Framework

Akre

Three-Legged Stool

Schloss

Asset-Value Discipline

Neff

Low-P/E Total Return

Sleep

Scale Economies Shared

Templeton

Global Bargain Hunter

Ackman

Activist Value

Dreman

Contrarian Value

Piotroski

F-Score

Greenblatt

Magic Formula

Graham

Defensive Value

VerdictNEUTRALNEUTRALFAILPASSFAILFAILBUYNEUTRALNEUTRALBUYNEUTRALNEUTRALFAILNEUTRALFAIL · Rank #858 (Top 26.7%)PASS
Score
Analysis
Intrinsic ValueN/AN/AN/AN/AN/AN/AN/A
Margin of SafetyN/A-66.2%-292.8%N/A-63.1%N/A+20.7%N/AN/AN/A-170.6%-57.6%-134.7%N/A-265.2%-228.3%
Data As Of10-K (2026-08-25)10-K (2026-08-25)10-K (2026-08-25)10-K (2026-08-25)10-K (2026-08-25)10-K (2026-08-25)10-K (2026-08-25)10-K (2026-08-24)10-K (2026-08-24)10-K (2026-08-23)10-K (2026-08-23)10-K (2026-08-23)10-K (2026-08-23)10-K (2026-08-23)10-K (2026-08-23)10-K (2026-08-23)

Where It Passes

  • Debt & Leverage64% pass✓ 10✗ 4▾

    7 of 11 pass — Marks, Lynch, Schloss +1 more object

    Debt Levels0.09
    ✓MungerDebt/Equity < 0.5✓AkreDebt/Equity < 0.3
    Interest Coverage & Debt/EBITDAIC=50.9x, D/EBITDA=N/A (D&A unavailable)
    ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x
    Debt/Equity & Interest CoverageD/E: 0.09, IC: 50.9x
    ✓BuffettD/E < 0.5 AND Interest Coverage > 5x
    Total Debt / Equity0.09
    ✓Lynch< 0.33
    Cash - Long-term Debt$-10.1B
    ✗LynchPositive preferred
    Total Debt / Shareholders' Equity0.09x
    ✓SchlossD/E < 1.00x✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓Dreman< 0.8
    Current Assets / Current Liabilities1.23x
    ✗SchlossCurrent ratio >= 1.50x (app cutoff)✗Dreman> 1.5
    Total Debt / Shareholders Equity0.09
    ✓Ackman<= 1.0
    LT Debt / Total Assets Change6.49% -> 4.10%
    ✓PiotroskiDecreased YoY
    LT Debt vs Net Current AssetsLT Debt $31.1B vs NCA $38.9B
    ✓GrahamLT Debt <= Net Current Assets
  • Growth63% pass✓ 8✗ 5▾

    5 of 8 pass — Lynch, Dreman and Graham object

    Positive Net Income Frequency28/28 years positive
    ✓MarksPositive net income in >= 7 of last 10 years
    Basic earnings-growth PEG (dividends excluded)1.63
    ✗Lynch< 1.0 (ideally < 0.5)
    3-5 Year EPS CAGR17.4%
    ✓Lynch15-30% (Fast Grower); > 0% to pass
    Inventory Growth vs Revenue GrowthInv: 48.9% vs Rev: 17.8%
    ✗LynchInventory growth < Revenue growth
    3-5 Year Diluted EPS CAGR17.4% over 5 years
    ✓Neff7%-20% annualized
    Revenue growth vs. gross and operating margin trendgross margin 69.8% -> 67.9%, operating margin 44.6% -> 46.8%
    ✓SleepRevenue rising; gross margin flat or falling; operating margin holding
    5-year Revenue CAGR14.6%
    ✓SleepCAGR > 7%
    5-Year EPS CAGR17.4% CAGR over 5 years
    ✓Templeton> 0% (5-year EPS CAGR)
    3yr Median Revenue Growth15.7%
    ✓Ackman>= 5%
    Positive EPS Growth Frequency5/5 years with positive EPS growth
    ✓AckmanPositive EPS growth in >= 3 of last 5 years
    EPS Growth Direction
    ✗DremanPositive over recent years
    EPS CAGR
    ✗Dreman> 5% annualized
    EPS Growth (3-yr avg, 10-yr window)
    ✗Graham>= 33% growth
  • Efficiency63% pass✓ 7✗ 4▾

    5 of 8 pass — Dreman, Piotroski and Graham object

    Return on Invested Capital25.4%
    ✓Munger> 15%
    ROIC (3-5 yr avg)29.8%
    ✓Buffett> 10%
    ROIC - WACC+19.8%
    ✓BuffettPositive (WACC = 10%)
    ROIC (high and growing)FY2023: ROIC=27.6%; FY2024: ROIC=26.3%; FY2025: ROIC=25.4%
    ✓AkreLatest 3 consecutive FYs: ROIC > 15% in each
    Reinvestment Rate x ROIC20.4% (RR=80% x ROIC=25.4%)
    ✓AkreReinvestment Rate * ROIC > 10%
    ROIC (5-year)5/5 years above 12% (latest 25.4%)
    ✓SleepROIC > 12% in a majority of years
    Current Assets / Current Liabilities1.23
    ✗Dreman> 1.5
    Current Ratio Change YoY1.35 -> 1.23
    ✗PiotroskiIncreased YoY
    Revenue / Total Assets Change YoY0.46x -> 0.44x
    ✗PiotroskiImproved YoY
    EBIT / (NWC + Net Fixed Assets)45.6%
    ✓Greenblatt> 25%
    Current Ratio1.23
    ✗Graham>= 2.0

Where It Falls Short

  • Valuation0% pass✓ 1✗ 25▾

    No clean pass — all 12 investors flag at least one valuation criterion

    Revenue / market capitalization+0.0878; #4274/5203 (top 82.1%)
    ✗OshaughnessyTop 10% of eligible cross-section
    Net income / market capitalization+3.54%; #2032/6251 (top 32.5%)
    ✗OshaughnessyTop 10% of eligible cross-section
    (Operating cash flow - capex) / market capitalization+1.77%; #2225/4487 (top 49.6%)
    ✗OshaughnessyTop 10% of eligible cross-section
    Trailing six-month price return through the evaluation date+37.56%; #978/6203 (top 15.8%)
    ✗OshaughnessyTop 10% of eligible cross-section
    Valuation ReasonablenessP/E=28.4x
    ✗MungerP/E < 25 or Owner Earnings Yield > 5%
    P/B or P/E vs. Historical AverageP/E=28.4x, P/B=8.5x
    ✗MarksP/E < 15 or P/B < 2.0
    Discount to Intrinsic Value-134.7% (IV=$216.95 vs Price=$509.22)
    ✗Marks>= 20% below intrinsic value
    Basic earnings-growth PEG (dividends excluded)1.63
    ✗Lynch< 1.0 (ideally < 0.5)
    P/E or FCF YieldP/E=28.4x, FCF Yield=1.8%
    ✗PabraiP/E < 15 or FCF Yield > 10%
    Price / Book Value per Share8.55x
    ✗SchlossP/B <= 0.80x (app cutoff)✗Templeton< 1.5x✗Dreman< 1.2x
    Price / Tangible Book Value per Share12.43x
    ✗SchlossP/TBV <= 1.00x (app cutoff)
    Book Value per Share Change+215.5%
    ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)
    Price / Diluted EPS28.4x
    ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)
    (EPS CAGR % + Dividend Yield %) / P/E0.64
    ✗Neff> 0.7 (Neff's published traditional edge)
    Price / EPS28.4x
    ✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)✗Dreman< 12x
    Price vs. Trailing Low138% of trailing low ($370.17)
    ✗Templeton<= 120% of trailing low (certified split-adjusted live window)
    Price / FCF per Share56.4x
    ✗Ackman<= 25
    Price / (CFO / Shares)20.7x
    ✗Dreman< 8x
    EBIT / Enterprise Value4.1%
    ✗Greenblatt> 10%
    Earnings Yield + ROC AssessmentEY=4.1%, ROC=45.6%
    ✗GreenblattBoth EY > 10% and ROC > 25%
    Price / 3-yr avg EPS35.2x
    ✗Graham<= 15x
    Price-to-Book Ratio8.5x
    ✗Graham<= 1.5x
    P/E x P/B300.90
    ✗Graham<= 22.5
  • Valuation models11% pass✓ 1✗ 8▾

    Models split on MSFT at $509.22 — fair values range $129.65–$641.75

    Munger fair value$306.41
    ✗Munger-66.2% margin vs $509.22
    Marks fair value$129.65
    ✗Marks-292.8% margin vs $509.22
    Lynch fair value$312.26
    ✗Lynch-63.1% margin vs $509.22
    Akre fair value$641.75
    ✓Akre+20.7% margin vs $509.22
    Templeton fair value$188.16
    ✗Templeton-170.6% margin vs $509.22
    Ackman fair value$323.18
    ✗Ackman-57.6% margin vs $509.22
    Dreman fair value$216.95
    ✗Dreman-134.7% margin vs $509.22
    Greenblatt fair value$139.44
    ✗Greenblatt-265.2% margin vs $509.22
    Graham fair value$155.12
    ✗Graham-228.3% margin vs $509.22
  • Cash Flow40% pass✓ 5✗ 7▾

    6 of 10 flag MSFT's cash flow — Oshaughnessy, Buffett, Lynch +3 more

    (Operating cash flow - capex) / market capitalization+1.77%; #2225/4487 (top 49.6%)
    ✗OshaughnessyTop 10% of eligible cross-section
    FCF Positive17/17 years FCF positive
    ✓MarksPositive FCF in majority of recent years
    Free Cash Flow Proxy
    ✗BuffettPositive and growing
    FCF Positive and Growing$67.0B
    ✗LynchPositive and growing
    P/E or FCF YieldP/E=28.4x, FCF Yield=1.8%
    ✗PabraiP/E < 15 or FCF Yield > 10%
    Operating Cash Flow - Capital Expenditures$67.0B
    ✓Neff> $0 (app proxy for a strong fundamental case)
    Positive Operating Cash Flow frequency17/17 years positive
    ✓SleepPositive OCF in >= 70% of available years
    (OCF - CapEx) / Market Cap1.8%
    ✗Ackman>= 4%
    Price / FCF per Share56.4x
    ✗Ackman<= 25
    Price / (CFO / Shares)20.7x
    ✗Dreman< 8x
    Operating Cash Flow$182.9B
    ✓PiotroskiCFO > 0
    (CFO / Total Assets) vs ROACFO/Assets=24.12%, ROA=17.64%
    ✓PiotroskiCFO/Assets > ROA
  • Verdicts44% pass✓ 4✗ 5▾

    Split decision: 7 NEUTRAL · 4 FAIL · 2 PASS · 2 BUY

    Overall verdict
    •OshaughnessyNEUTRAL (Not ranked)•MungerNEUTRAL (3/4)✗MarksFAIL (2/5)✓BuffettPASS (5/9)✗LynchFAIL (3/7)✗PabraiFAIL (1/3)✓AkreBUY (5/6)•SchlossNEUTRAL (4/7)•NeffNEUTRAL (4/6)✓SleepBUY (5/6)•TempletonNEUTRAL (5/8)•AckmanNEUTRAL (7/9)✗DremanFAIL (4/11)•PiotroskiNEUTRAL (F-Score 6)✗GreenblattRank #858✓GrahamPASS (4/9)
  • Profitability47% pass✓ 19✗ 12▾

    8 of 15 flag MSFT's profitability — Oshaughnessy, Marks, Buffett +5 more

    Net income / market capitalization+3.54%; #2032/6251 (top 32.5%)
    ✗OshaughnessyTop 10% of eligible cross-section
    Discount to Intrinsic Value-134.7% (IV=$216.95 vs Price=$509.22)
    ✗Marks>= 20% below intrinsic value
    Positive Net Income Frequency28/28 years positive
    ✓MarksPositive net income in >= 7 of last 10 years
    Net Income Positive (10+ years)28/28 years positive
    ✓BuffettPositive every year for 10+ years
    ROE (up to 5-year arithmetic mean)34.3%
    ✓Buffett> 15% arithmetic mean (app rule)
    Operating Margin (10-yr trend)46.8% (latest)
    ✗BuffettStable or rising over 10 years
    Free Cash Flow Proxy
    ✗BuffettPositive and growing
    Earnings Variance (10-yr CoV)
    ✗BuffettCoV < 0.3
    Retained Earnings Effectiveness
    ✗Buffett$1 retained -> > $1 market value created
    Basic earnings-growth PEG (dividends excluded)1.63
    ✗Lynch< 1.0 (ideally < 0.5)
    3-5 Year EPS CAGR17.4%
    ✓Lynch15-30% (Fast Grower); > 0% to pass
    ROE30.2%
    ✓Lynch> 15%
    Margin of SafetyP/E=28.4x, P/B=8.5x
    ✗PabraiP/B < 1.5 or P/E < 15
    Return on Equity30.9% (3-yr avg)
    ✓AkreROE > 20% (3-year avg)
    Positive Diluted-EPS Years10/10 years positive
    ✓Schloss>= 70% positive over 5-10 observed years (app rule)
    3-5 Year Diluted EPS CAGR17.4% over 5 years
    ✓Neff7%-20% annualized
    Revenue growth vs. gross and operating margin trendgross margin 69.8% -> 67.9%, operating margin 44.6% -> 46.8%
    ✓SleepRevenue rising; gross margin flat or falling; operating margin holding
    5-Year EPS CAGR17.4% CAGR over 5 years
    ✓Templeton> 0% (5-year EPS CAGR)
    Operating Margin Trend44.6% (2023) -> 46.8% (2025)
    ✓TempletonNon-negative operating-margin trend over 3 years
    Operating Income / Revenue46.8%
    ✓Ackman>= 15%
    Net Income / Shareholders Equity30.2%
    ✓Ackman>= 15%
    Pre-Tax Income / Revenue50.0%
    ✓Dreman>= 8%
    Net Income / Shareholders' Equity30.2%
    ✓Dreman> 12%
    Net Income / Total Assets17.64%
    ✓PiotroskiROA > 0
    ROA Change YoY16.45% -> 17.64% (delta: +1.19%)
    ✓PiotroskiCurrent ROA > Prior ROA
    (CFO / Total Assets) vs ROACFO/Assets=24.12%, ROA=17.64%
    ✓PiotroskiCFO/Assets > ROA
    Gross Margin Change YoY68.8% -> 67.9%
    ✗PiotroskiImproved YoY
    EBIT / Enterprise Value4.1%
    ✗Greenblatt> 10%
    Earnings Yield + ROC AssessmentEY=4.1%, ROC=45.6%
    ✗GreenblattBoth EY > 10% and ROC > 25%
    Positive EPS (10 years)28/28 years positive
    ✓GrahamPositive EPS every year for 10 years
    EPS Growth (3-yr avg, 10-yr window)
    ✗Graham>= 33% growth

Business & financials

Company Profile

Industry: Business Services
Size: Mega Cap($3.78T)
Revenue: $331.8B+17.8% YoY
Net Income: $133.7B+31.3% YoY

Financial Snapshot

Operating Margin46.8%
Return on Equity30.2%
Debt / Equity0.09
Current Ratio1.23
EPS (Diluted)$17.95+31.6% 1y
Buybacks (1y)$22.3B
Buybacks (2y)$40.7B
Shares Retired0.1% / 0.1% 2y

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Shareholder Return

Fiscal 2025

Retired 0.1% of shares last year, 0.1% over two.

Buybacks
$22.3B
Dividends
$26.4B

What drove EPS

A buyback raises earnings per share without the company earning more. This splits each year's change into the two.

FY22
0.3% = −0.5% + 0.8%
FY23
21.9% = 21.8% + 0.1%
FY24
15.6% = 15.5% + 0.0%
FY25
31.6% = 31.3% + 0.2%
Earnings Fewer shares More shares

Share count is the denominator the filer used for diluted EPS, recovered as net income ÷ EPS — not the balance-sheet count, which is a point-in-time figure and would put the timing difference into this split. Years with a loss are omitted: a smaller share count makes a loss per share larger, so the decomposition inverts.

Company Financials

Annual data (10-K) · Last 5 years

MetricFY 2025FY 2024FY 2023FY 2022FY 2021
Market Cap$3.8T$3.1Test.$2.9Test.$1.8Test.$2.2Test.
Revenue$331.8B↑18%$281.7B↑15%$245.1B↑16%$211.9B↑7%$198.3B
Operating Income$155.2B↑21%$128.5B↑17%$109.4B↑24%$88.5B↑6%$83.4B
Net Income$133.7B↑31%$101.8B↑16%$88.1B↑22%$72.4B↓1%$72.7B
EPS (Diluted)$17.95↑32%$13.64↑16%$11.80↑22%$9.68$9.65
Gross Margin67.9%↓1%68.8%↓1%69.8%↑1%68.9%↑1%68.4%
Operating Margin46.8%↑3%45.6%↑2%44.6%↑7%41.8%↓1%42.1%
ROE30.2%↑2%29.6%↓10%32.8%↓6%35.1%↓20%43.7%
Total Debt$40.3B↓7%$43.2B↓4%$44.9B↓5%$47.2B↓5%$49.8B
Shareholders' Equity$442.4B↑29%$343.5B↑28%$268.5B↑30%$206.2B↑24%$166.5B
Current Ratio1.23↓9%1.35↑6%1.27↓28%1.77↓1%1.78
Debt / Equity0.09↓27%0.13↓25%0.17↓27%0.23↓23%0.30
Operating Cash Flow$182.9B↑34%$136.2B↑15%$118.5B↑35%$87.6B↓2%$89.0B
Free Cash Flow$67.0B↓6%$71.6B↓3%$74.1B↑25%$59.5B↓9%$65.1B

Score history

Historical Score Timeline

Industry peers

Industry Peers

Similar companies in Business Services

MSFT vs Peers — Financial Grading

Revenue$331.8BTop 25%
Net Income$133.7BTop 25%
ROE30.2%Median
D/E0.09Top 25%
Op. Margin46.8%Top 25%
Curr. Ratio1.23Median
CompanyMarket CapPriceRevenueNet IncomeROED/EOp. MarginCurr. RatioGrahamBuffettLynchGreenblattPiotroskiDreman
Mastercard IncMA$514.8B$568.26$32.8B$15.0B193.5%2.4657.6%1.032/95/94/70/3F-Score 83/11
AUTOMATIC DATA PROCESSING INCADP$103.7B$261.80$21.9B$4.4B73.2%0.8224.2%1.054/95/93/70/3F-Score 65/11
ELECTRONIC ARTS INC.EA$52.9B$209.70$7.5B$887.0M13.1%0.2215.4%1.051/94/93/70/3F-Score 66/11
PAYCHEX INCPAYX$35.4B$99.31$6.5B$1.8B47.1%1.2238.6%1.264/96/94/71/3F-Score 76/11
Rubrik, Inc.RBRK$23.4B$113.80$1.3B$348.8M67.1%—-26.2%1.691/90/90/70/3F-Score 42/11
Grab Holdings LtdGRAB$12.7B$3.10$3.4B$268.0M4.0%0.311.9%1.752/92/92/70/3F-Score 44/11
COMMVAULT SYSTEMS INCCVLT$6.1B$148.08$1.2B$70.7M942.8%—6.3%1.951/92/94/70/3F-Score 65/11
ROBERT HALF INC.RHI$3.8B$36.88$5.4B$133.0M10.4%—1.4%1.534/95/91/70/3F-Score 54/11