Price to Operating Profit (P/OP)
since 2005
Calculation
Microsoft Corp., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | 18.68 | = | 390.54 | ÷ | 20.91 | 20.91 | = | 155,237 | ÷ | 7,425,545,491 | |
| Jul 30, 2025 | 29.68 | = | 513.24 | ÷ | 17.29 | 17.29 | = | 128,528 | ÷ | 7,433,166,379 | |
| Jul 30, 2024 | 28.73 | = | 422.92 | ÷ | 14.72 | 14.72 | = | 109,433 | ÷ | 7,433,038,381 | |
| Jul 27, 2023 | 27.76 | = | 330.72 | ÷ | 11.91 | 11.91 | = | 88,523 | ÷ | 7,429,763,722 | |
| Jul 28, 2022 | 24.72 | = | 276.41 | ÷ | 11.18 | 11.18 | = | 83,383 | ÷ | 7,457,891,872 | |
| Jul 29, 2021 | 30.79 | = | 286.50 | ÷ | 9.30 | 9.30 | = | 69,916 | ÷ | 7,514,891,248 | |
| Jul 31, 2020 | 29.30 | = | 205.01 | ÷ | 7.00 | 7.00 | = | 52,959 | ÷ | 7,567,652,935 | |
| Aug 1, 2019 | 24.54 | = | 138.06 | ÷ | 5.63 | 5.63 | = | 42,959 | ÷ | 7,635,409,400 | |
| Aug 3, 2018 | 23.63 | = | 108.04 | ÷ | 4.57 | 4.57 | = | 35,058 | ÷ | 7,668,217,316 | |
| Aug 2, 2017 | 24.93 | = | 72.26 | ÷ | 2.90 | 2.90 | = | 22,326 | ÷ | 7,702,243,979 | |
| Jul 28, 2016 | 21.70 | = | 56.21 | ÷ | 2.59 | 2.59 | = | 20,182 | ÷ | 7,792,515,573 | |
| Jul 31, 2015 | 20.57 | = | 46.70 | ÷ | 2.27 | 2.27 | = | 18,161 | ÷ | 7,997,980,969 | |
| Jul 31, 2014 | 12.81 | = | 43.16 | ÷ | 3.37 | 3.37 | = | 27,759 | ÷ | 8,239,848,789 | |
| Jul 30, 2013 | 9.91 | = | 31.85 | ÷ | 3.21 | 3.21 | = | 26,764 | ÷ | 8,329,956,402 | |
| Jul 26, 2012 | 11.23 | = | 29.16 | ÷ | 2.60 | 2.60 | = | 21,763 | ÷ | 8,383,396,575 | |
| Jul 28, 2011 | 8.55 | = | 27.72 | ÷ | 3.24 | 3.24 | = | 27,161 | ÷ | 8,378,265,782 | |
| Jul 30, 2010 | 9.27 | = | 25.81 | ÷ | 2.78 | 2.78 | = | 24,098 | ÷ | 8,653,567,331 | |
| Jul 30, 2009 | 10.42 | = | 23.81 | ÷ | 2.29 | 2.29 | = | 20,363 | ÷ | 8,910,673,817 | |
| Jul 31, 2008 | 10.44 | = | 25.72 | ÷ | 2.46 | 2.46 | = | 22,492 | ÷ | 9,130,293,074 | |
| Aug 3, 2007 | 56.63 | = | 111.89 | ÷ | 1.98 | 1.98 | = | 18,524 | ÷ | 9,375,492,496 | |
| Aug 25, 2006 | 48.35 | = | 79.88 | ÷ | 1.65 | 1.65 | = | 16,472 | ÷ | 9,969,991,800 | |
| Aug 26, 2005 | 59.14 | = | 80.38 | ÷ | 1.36 | 1.36 | = | 14,561 | ÷ | 10,712,706,028 |
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Microsoft Corp. Annual Report.
The analysis of the Price to Operating Profit (P/OP) ratio reveals three distinct valuation phases characterized by significant volatility and a long-term transition in market sentiment regarding operating performance.
- Valuation Cycle Analysis
- An initial period of high valuation is observed between 2005 and 2007, with P/OP ratios ranging from 48.35 to 59.14. This was followed by a sharp contraction starting in 2008, where the ratio plummeted to 10.44 and reached a cyclical low of 8.55 in 2011. A sustained expansion phase began in 2015, with the ratio climbing steadily from 20.57 to a peak of 30.79 in 2021, before stabilizing in the mid-to-high 20s through 2024. A notable reduction to 18.68 is recorded for 2026.
- Operating Profitability Growth
- Operating profit per share exhibits a consistent long-term upward trajectory. From a base of 1.36 USD in 2005, profit per share grew to 14.72 USD by 2023 and reached 20.91 USD by 2026. Despite a temporary dip between 2014 and 2016, the overall trend demonstrates a significant and scalable increase in operational efficiency and profitability over the two-decade period.
- Share Price and Ratio Correlation
- The P/OP ratio fluctuations were driven more by share price volatility than by operating profit volatility. Between 2008 and 2012, the ratio remained depressed because the share price dropped and stagnated (ranging between 23.81 USD and 29.16 USD) while operating profits continued to grow or remain stable. Conversely, the valuation expansion from 2017 onward reflects a market willingness to pay a higher premium for each dollar of operating profit, coinciding with a share price increase from 72.26 USD to a peak of 513.24 USD in 2024.
- Recent Performance Trends
- The period between 2020 and 2024 shows a high degree of synchronization between share price appreciation and operating profit growth. However, the final data point for 2026 indicates a divergence, where a decline in share price to 390.54 USD, coupled with continuing growth in operating profit per share to 20.91 USD, resulted in a significant compression of the P/OP ratio to 18.68.
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Comparison to Competitors
Microsoft Corp., P/OP, long-term trends, comparison to competitors
| Microsoft Corp. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Datadog Inc. | Intuit Inc. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | 18.68 | — | — | — | — | — | — | — | 24.47 | — | — | 21.38 | — | — | 53.84 |
| Jul 30, 2025 | 29.68 | 14.62 | 14.34 | 33.47 | 54.20 | — | — | 37.87 | 33.50 | 224.99 | 102.53 | 38.94 | 66.94 | 100.63 | 155.71 |
| Jul 30, 2024 | 28.73 | 23.52 | 26.38 | 58.16 | 52.42 | — | 797.11 | 48.11 | 25.65 | 941.61 | 159.88 | 58.80 | 152.95 | 56.25 | 381.31 |
| Jul 27, 2023 | 27.76 | 21.69 | 40.52 | 31.12 | 65.43 | — | — | 49.04 | 25.30 | 431.61 | 193.40 | 177.62 | 206.26 | 67.90 | — |
| Jul 28, 2022 | 24.72 | 16.83 | 25.85 | — | 47.21 | — | — | 46.05 | 16.51 | — | — | 357.52 | 260.27 | 43.85 | — |
| Jul 29, 2021 | 30.79 | 28.35 | 40.64 | 111.61 | 48.13 | — | — | 62.00 | 14.31 | — | — | 431.39 | 436.46 | 75.64 | — |
| Jul 31, 2020 | 29.30 | 22.21 | 51.75 | — | 57.54 | — | — | 41.56 | 12.17 | — | — | 511.08 | 583.08 | 59.90 | — |
| Aug 1, 2019 | 24.54 | 18.63 | 51.63 | — | 40.67 | — | — | 40.45 | 13.83 | — | — | 223.46 | 1,590.34 | 40.48 | — |
| Aug 3, 2018 | 23.63 | 16.75 | 42.06 | — | 40.66 | — | — | 37.92 | 12.83 | — | — | 395.31 | — | 35.54 | — |
| Aug 2, 2017 | 24.93 | 19.47 | 44.86 | — | 35.08 | — | — | 25.94 | 16.52 | — | — | 908.77 | — | 37.64 | — |
| Jul 28, 2016 | 21.70 | 15.44 | 36.62 | — | 33.61 | — | — | 23.33 | 13.09 | — | — | 411.51 | — | 28.34 | — |
| Jul 31, 2015 | 20.57 | 15.66 | 49.21 | — | 22.23 | — | — | 31.60 | 12.84 | — | — | — | — | 25.82 | — |
| Jul 31, 2014 | 12.81 | 11.94 | 86.32 | — | 26.17 | — | — | 18.25 | 12.12 | — | — | — | — | 26.04 | — |
| Jul 30, 2013 | 9.91 | 11.50 | 71.49 | — | 22.85 | — | — | 15.12 | 9.51 | — | — | — | — | 24.81 | — |
| Jul 26, 2012 | 11.23 | 11.84 | 16.04 | — | 18.94 | — | — | 15.05 | 9.91 | — | 1,147.44 | — | — | 25.46 | — |
| Jul 28, 2011 | 8.55 | 11.55 | 14.01 | — | 26.88 | — | — | 14.19 | 13.61 | — | — | 166.46 | — | 18.21 | — |
| Jul 30, 2010 | 9.27 | 10.76 | 17.20 | — | — | — | — | 16.51 | 11.95 | — | — | 83.25 | — | 22.01 | — |
| Jul 30, 2009 | 10.42 | 10.49 | 26.10 | — | — | — | — | 13.11 | 12.94 | — | — | 59.54 | — | 15.18 | — |
| Jul 31, 2008 | 10.44 | 7.72 | 10.04 | — | — | — | — | 15.15 | 13.68 | — | — | 350.81 | — | 11.75 | — |
| Aug 3, 2007 | 56.63 | 12.16 | 22.98 | — | 9.72 | — | — | 15.13 | 16.87 | — | — | — | — | 32.49 | — |
| Aug 25, 2006 | 48.35 | 14.25 | 41.03 | — | 26.13 | — | — | 20.38 | 16.72 | — | — | 214.74 | — | 131.87 | — |
| Aug 26, 2005 | 59.14 | 10.72 | 31.95 | — | 43.13 | — | — | 15.31 | 17.01 | — | — | 233.65 | — | — | — |
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).