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 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: 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 share price demonstrated notable volatility over the analyzed period. Initially, the price was around $80 in 2005 and remained relatively stable through 2006 and 2007. There was a significant decline in 2008 and 2009, with the price dipping below $30, reaching the lowest point in this interval. Subsequently, the share price showed a general upward trend beginning in 2010, with acceleration in growth particularly evident after 2017, culminating in a peak of approximately $423 by 2024.
Operating profit per share exhibited a steady increase across the years. Starting from a low base of $1.36 in 2005, the profit per share grew consistently, with minor fluctuations, surpassing $11 by 2022 and eventually reaching $14.72 by 2024. This reflects enhanced operational efficiency and profitability over time, despite some intermittent variations.
The price-to-operating-profit ratio (P/OP) experienced considerable fluctuations, reflecting shifts in market valuation relative to earnings. High ratios were observed early in the period, particularly above 50 in 2005 and 2007, followed by a sharp decline around 2008-2010 to ratios near 9-11, indicating a more attractive valuation relative to operating profit. From 2011 onwards, the ratio generally increased, peaking above 30 in 2021, before decreasing slightly but staying elevated towards the latter years. This pattern suggests changing investor sentiment, possibly reflecting expectations for future growth or varying market conditions. The increase in share price outpacing the growth in operating profit per share in recent years likely contributed to the rising P/OP ratios.
In summary, the data shows a company that experienced early share price instability around the financial crisis, subsequently achieving strong and sustained growth in operating profit per share accompanied by a substantial rise in share price. The fluctuation in the P/OP ratio highlights changing valuation perspectives over time, with recent years characterized by higher valuation multiples despite robust earnings growth.
- Share Price
- Initial stability around $80, sharp decline during 2008-2009 below $30, followed by sustained growth reaching above $420 by 2024.
- Operating Profit per Share
- Consistent upward trend from $1.36 in 2005 to $14.72 in 2024, with minor fluctuations indicating improving profitability.
- Price-to-Operating-Profit Ratio (P/OP)
- High ratios (~50-60) in early years, dropping below 12 during 2008-2010, then rising to around 30 in later years, reflecting changing market valuation relative to earnings.
Comparison to Competitors
Microsoft Corp., P/OP, long-term trends, comparison to competitors
| Microsoft Corp. | Accenture PLC | Adobe Inc. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Intuit Inc. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jul 30, 2024 | 28.73 | 23.52 | 26.38 | 52.42 | — | 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 | 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 | 260.26 | 43.85 | — |
| Jul 29, 2021 | 30.79 | 28.35 | 40.64 | 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 | 583.07 | 59.90 | — |
| Aug 1, 2019 | 24.54 | 18.63 | 51.63 | 40.67 | — | 40.45 | 13.83 | — | — | 223.46 | 1,590.30 | 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: 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).