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Microsoft Corp. (MSFT)
Common Stock Valuation Ratios (Price Multiples)
Difficulty: Beginner
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Microsoft Corp., current price multiples
| Microsoft Corp. | Adobe Inc. | Alphabet Inc. | Facebook Inc. | International Business Machines Corp. | Intuit Inc. | Oracle Corp. | salesforce.com inc. | Software & Computer Services | Technology | |
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| Selected Financial Data | ||||||||||
| Current share price (P) | $ |
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| No. shares of common stock outstanding | |
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| Growth rate (g) | |
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| Earnings per share (EPS) | $ |
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| Next year expected EPS | $ |
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| Operating profit per share | $ |
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| Sales per share | $ |
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| Book value per share (BVPS) | $ |
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| Ratios (Price Multiples) | ||||||||||
| Price to earnings (P/E) | |
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| Price to next year expected earnings | |
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| Price-earnings-growth (PEG) | |
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| Price to operating profit (P/OP) | |
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| Price to sales (P/S) | |
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| Price to book value (P/BV) | |
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Based on: 10-K (filing date: 2019-08-01).
If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Microsoft Corp., historical price multiples
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
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| Price to earnings (P/E) | |
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| Price to operating profit (P/OP) | |
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| Price to sales (P/S) | |
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| Price to book value (P/BV) | |
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Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).
| Ratio | Description | The company |
|---|---|---|
| P/E ratio | The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. | Microsoft Corp.’s P/E ratio increased from 2017 to 2018 but then slightly declined from 2018 to 2019 not reaching 2017 level. |
| P/OP ratio | Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. | Microsoft Corp.’s P/OP ratio declined from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level. |
| P/S ratio | An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. | Microsoft Corp.’s P/S ratio increased from 2017 to 2018 and from 2018 to 2019. |
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company’s required rate of return and its actual rate of return. | Microsoft Corp.’s P/BV ratio increased from 2017 to 2018 and from 2018 to 2019. |
Price to Earnings (P/E)
Microsoft Corp., historical P/E calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
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| No. shares of common stock outstanding1 | |
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| Selected Financial Data (USD $) | |||||||
| Net income (in millions) | |
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| Earnings per share (EPS)2 | |
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| Share price1, 3 | |
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| Ratio | |||||||
| P/E ratio4 | |
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| Benchmarks | |||||||
| P/E Ratio, Competitors5 | |||||||
| Adobe Inc. | |
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| Alphabet Inc. | |
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| Facebook Inc. | |
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| International Business Machines Corp. | |
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| Intuit Inc. | |
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| Oracle Corp. | |
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| salesforce.com inc. | |
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| P/E Ratio, Sector | |||||||
| Software & Computer Services | |
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| P/E Ratio, Industry | |||||||
| Technology | |
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Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Close price on the filing date of Microsoft Corp.’s Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| P/E ratio | The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. | Microsoft Corp.’s P/E ratio increased from 2017 to 2018 but then slightly declined from 2018 to 2019 not reaching 2017 level. |
Price to Operating Profit (P/OP)
Microsoft Corp., historical P/OP calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
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| No. shares of common stock outstanding1 | |
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| Selected Financial Data (USD $) | |||||||
| Operating income (in millions) | |
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| Operating profit per share2 | |
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| Share price1, 3 | |
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| Ratio | |||||||
| P/OP ratio4 | |
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| Benchmarks | |||||||
| P/OP Ratio, Competitors5 | |||||||
| Adobe Inc. | |
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| Alphabet Inc. | |
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| Facebook Inc. | |
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| International Business Machines Corp. | |
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| Intuit Inc. | |
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| Oracle Corp. | |
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| salesforce.com inc. | |
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| P/OP Ratio, Sector | |||||||
| Software & Computer Services | |
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| P/OP Ratio, Industry | |||||||
| Technology | |
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Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Close price on the filing date of Microsoft Corp.’s Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| P/OP ratio | Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. | Microsoft Corp.’s P/OP ratio declined from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level. |
Price to Sales (P/S)
Microsoft Corp., historical P/S calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
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| No. shares of common stock outstanding1 | |
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| Selected Financial Data (USD $) | |||||||
| Revenue (in millions) | |
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| Sales per share2 | |
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| Share price1, 3 | |
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| Ratio | |||||||
| P/S ratio4 | |
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| Benchmarks | |||||||
| P/S Ratio, Competitors5 | |||||||
| Adobe Inc. | |
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| Alphabet Inc. | |
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| Facebook Inc. | |
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| International Business Machines Corp. | |
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| Intuit Inc. | |
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| Oracle Corp. | |
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| salesforce.com inc. | |
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| P/S Ratio, Sector | |||||||
| Software & Computer Services | |
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| P/S Ratio, Industry | |||||||
| Technology | |
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Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Close price on the filing date of Microsoft Corp.’s Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| P/S ratio | An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. | Microsoft Corp.’s P/S ratio increased from 2017 to 2018 and from 2018 to 2019. |
Price to Book Value (P/BV)
Microsoft Corp., historical P/BV calculation, comparison to benchmarks
| Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | ||
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| No. shares of common stock outstanding1 | |
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| Selected Financial Data (USD $) | |||||||
| Stockholders’ equity (in millions) | |
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| Book value per share (BVPS)2 | |
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| Share price1, 3 | |
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| Ratio | |||||||
| P/BV ratio4 | |
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| Benchmarks | |||||||
| P/BV Ratio, Competitors5 | |||||||
| Adobe Inc. | |
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| Alphabet Inc. | |
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| Facebook Inc. | |
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| International Business Machines Corp. | |
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| Intuit Inc. | |
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| Oracle Corp. | |
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| salesforce.com inc. | |
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| P/BV Ratio, Sector | |||||||
| Software & Computer Services | |
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| P/BV Ratio, Industry | |||||||
| Technology | |
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Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Close price on the filing date of Microsoft Corp.’s Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
| Ratio | Description | The company |
|---|---|---|
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company’s required rate of return and its actual rate of return. | Microsoft Corp.’s P/BV ratio increased from 2017 to 2018 and from 2018 to 2019. |