Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Common Stock Valuation Ratios (Price Multiples) 

Microsoft Excel

Current Valuation Ratios

Microsoft Corp., current price multiples

Microsoft Excel
Microsoft Corp. Accenture PLC Adobe Inc. International Business Machines Corp. Intuit Inc. Mastercard Inc. Oracle Corp. PayPal Holdings Inc. Salesforce Inc. ServiceNow Inc. Visa Inc. Software & Services Information Technology
Selected Financial Data
Current share price (P) $232.90
No. shares of common stock outstanding 7,457,891,872
Growth rate (g) 20.66%
 
Earnings per share (EPS) $9.75
Next year expected EPS $11.77
Operating profit per share $11.18
Sales per share $26.59
Book value per share (BVPS) $22.33
Valuation Ratios (Price Multiples)
Price to earnings (P/E) 23.88 27.58 26.53 18.68 52.84 31.63 24.51 23.88 99.61 331.64 29.85 27.40 23.62
Price to next year expected earnings 19.79 22.45 20.91 17.71 42.42 17.16 17.41 20.62 97.06 310.98 24.59 22.86 19.34
Price-earnings-growth (PEG) 1.16 1.21 0.99 3.41 2.15 0.38 0.60 1.51 37.87 49.92 1.39 1.38 1.07
Price to operating profit (P/OP) 20.83 21.37 22.05 15.63 42.46 27.25 15.07 23.35 262.48 296.80 23.26 24.29 20.83
Price to sales (P/S) 8.76 3.22 8.11 1.87 8.58 14.55 3.88 3.92 5.43 12.94 15.25 7.71 6.21
Price to book value (P/BV) 10.43 8.34 8.65 5.68 6.64 37.58 4.58 2.47 20.64 9.78 10.46 9.95

Based on: 10-K (reporting date: 2022-06-30).

If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the 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

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Price to earnings (P/E) 28.34 35.14 35.04 26.86 50.00 26.25
Price to operating profit (P/OP) 24.72 30.79 29.30 24.54 23.63 24.93
Price to sales (P/S) 10.40 12.81 10.85 8.38 7.51 6.19
Price to book value (P/BV) 12.38 15.16 13.11 10.30 10.02 7.69

Based on: 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).

Valuation 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. P/E ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
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. P/OP ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
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. P/S ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. Microsoft Corp. P/BV ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Price to Earnings (P/E)

Microsoft Corp., historical P/E calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
No. shares of common stock outstanding1 7,457,891,872 7,514,891,248 7,567,652,935 7,635,409,400 7,668,217,316 7,702,243,979
Selected Financial Data (US$)
Net income (in millions) 72,738  61,271  44,281  39,240  16,571  21,204 
Earnings per share (EPS)2 9.75 8.15 5.85 5.14 2.16 2.75
Share price1, 3 276.41 286.50 205.01 138.06 108.04 72.26
Valuation Ratio
P/E ratio4 28.34 35.14 35.04 26.86 50.00 26.25
Benchmarks
P/E Ratio, Competitors5
Accenture PLC 36.58 28.32 24.58 24.10 26.18
Adobe Inc. 48.90 41.69 57.17 46.11 57.41
International Business Machines Corp. 19.40 19.30 13.35 14.25 25.07
Intuit Inc. 57.31 75.17 49.52 48.17 46.88 37.26
Mastercard Inc. 41.61 52.84 42.21 38.62 46.33
Oracle Corp. 26.85 15.84 16.69 16.89 45.90 22.49
PayPal Holdings Inc. 34.73 75.10 57.19 51.82 50.54
Salesforce Inc. 135.68 48.20 1,204.70 107.70 731.11 324.94
ServiceNow Inc. 487.70 978.47 106.89
Visa Inc. 34.83 40.76 32.08 30.03 37.19
P/E Ratio, Sector
Software & Services 35.22 38.84 29.82 39.44 31.77
P/E Ratio, Industry
Information Technology 29.30 32.94 24.23 23.80 24.48

Based on: 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).

1 Data adjusted for splits and stock dividends.

2 2022 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 72,738,000,000 ÷ 7,457,891,872 = 9.75

3 Closing price as at the filing date of Microsoft Corp. Annual Report.

4 2022 Calculation
P/E ratio = Share price ÷ EPS
= 276.41 ÷ 9.75 = 28.34

5 Click competitor name to see calculations.

Valuation 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. P/E ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Price to Operating Profit (P/OP)

Microsoft Corp., historical P/OP calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
No. shares of common stock outstanding1 7,457,891,872 7,514,891,248 7,567,652,935 7,635,409,400 7,668,217,316 7,702,243,979
Selected Financial Data (US$)
Operating income (in millions) 83,383  69,916  52,959  42,959  35,058  22,326 
Operating profit per share2 11.18 9.30 7.00 5.63 4.57 2.90
Share price1, 3 276.41 286.50 205.01 138.06 108.04 72.26
Valuation Ratio
P/OP ratio4 24.72 30.79 29.30 24.54 23.63 24.93
Benchmarks
P/OP Ratio, Competitors5
Accenture PLC 28.35 22.21 18.63 16.75 19.47
Adobe Inc. 40.64 51.75 51.63 42.06 44.86
International Business Machines Corp. 16.23 15.90 11.94 9.41 12.22
Intuit Inc. 46.05 62.00 41.56 40.45 37.92 25.94
Mastercard Inc. 35.85 41.92 35.46 31.07 27.39
Oracle Corp. 16.51 14.31 12.17 13.83 12.83 16.52
PayPal Holdings Inc. 33.98 95.94 51.72 48.58 42.65
Salesforce Inc. 357.52 431.39 511.08 223.46 395.31 908.77
ServiceNow Inc. 436.46 583.07 1,590.30
Visa Inc. 27.13 31.45 25.83 23.88 20.52
P/OP Ratio, Sector
Software & Services 31.22 32.42 26.18 23.02 22.96
P/OP Ratio, Industry
Information Technology 25.84 28.11 20.97 17.06 18.20

Based on: 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).

1 Data adjusted for splits and stock dividends.

2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 83,383,000,000 ÷ 7,457,891,872 = 11.18

3 Closing price as at the filing date of Microsoft Corp. Annual Report.

4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 276.41 ÷ 11.18 = 24.72

5 Click competitor name to see calculations.

Valuation 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. P/OP ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Price to Sales (P/S)

Microsoft Corp., historical P/S calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
No. shares of common stock outstanding1 7,457,891,872 7,514,891,248 7,567,652,935 7,635,409,400 7,668,217,316 7,702,243,979
Selected Financial Data (US$)
Revenue (in millions) 198,270  168,088  143,015  125,843  110,360  89,950 
Sales per share2 26.59 22.37 18.90 16.48 14.39 11.68
Share price1, 3 276.41 286.50 205.01 138.06 108.04 72.26
Valuation Ratio
P/S ratio4 10.40 12.81 10.85 8.38 7.51 6.19
Benchmarks
P/S Ratio, Competitors5
Accenture PLC 4.28 3.26 2.72 2.35 2.45
Adobe Inc. 14.94 17.04 15.11 13.23 13.32
International Business Machines Corp. 1.94 1.47 1.63 1.56 1.82
Intuit Inc. 9.30 16.09 11.78 11.05 9.52 6.99
Mastercard Inc. 19.14 22.14 20.30 15.13 14.51
Oracle Corp. 4.25 5.38 4.33 4.74 4.41 5.56
PayPal Holdings Inc. 5.71 14.71 7.91 6.90 6.93
Salesforce Inc. 7.40 9.24 8.88 9.00 8.89 6.96
ServiceNow Inc. 19.02 25.66 19.36 16.63 14.55
Visa Inc. 17.79 20.27 16.86 15.01 13.57
P/S Ratio, Sector
Software & Services 9.91 9.10 7.37 6.22 5.61
P/S Ratio, Industry
Information Technology 7.71 7.32 5.60 4.70 4.56

Based on: 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).

1 Data adjusted for splits and stock dividends.

2 2022 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= 198,270,000,000 ÷ 7,457,891,872 = 26.59

3 Closing price as at the filing date of Microsoft Corp. Annual Report.

4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= 276.41 ÷ 26.59 = 10.40

5 Click competitor name to see calculations.

Valuation 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. P/S ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Price to Book Value (P/BV)

Microsoft Corp., historical P/BV calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
No. shares of common stock outstanding1 7,457,891,872 7,514,891,248 7,567,652,935 7,635,409,400 7,668,217,316 7,702,243,979
Selected Financial Data (US$)
Stockholders’ equity (in millions) 166,542  141,988  118,304  102,330  82,718  72,394 
Book value per share (BVPS)2 22.33 18.89 15.63 13.40 10.79 9.40
Share price1, 3 276.41 286.50 205.01 138.06 108.04 72.26
Valuation Ratio
P/BV ratio4 12.38 15.16 13.11 10.30 10.02 7.69
Benchmarks
P/BV Ratio, Competitors5
Accenture PLC 11.06 8.51 8.15 9.44 10.08
Adobe Inc. 15.94 16.53 16.03 12.76 11.50
International Business Machines Corp. 5.90 5.24 6.04 7.40 8.20
Intuit Inc. 7.20 15.71 17.71 20.00 24.12 26.72
Mastercard Inc. 49.43 53.00 58.15 41.94 33.17
Oracle Corp. 41.57 14.01 8.59 3.84 3.90
PayPal Holdings Inc. 6.66 15.76 8.33 6.93 5.67
Salesforce Inc. 3.37 4.73 4.48 7.66 9.93 7.78
ServiceNow Inc. 30.36 40.91 31.48 39.04 48.15
Visa Inc. 11.41 12.23 11.17 9.10 7.61
P/BV Ratio, Sector
Software & Services 13.45 12.77 11.20 9.38 7.75
P/BV Ratio, Industry
Information Technology 12.35 11.46 8.82 7.28 5.70

Based on: 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).

1 Data adjusted for splits and stock dividends.

2 2022 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 166,542,000,000 ÷ 7,457,891,872 = 22.33

3 Closing price as at the filing date of Microsoft Corp. Annual Report.

4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= 276.41 ÷ 22.33 = 12.38

5 Click competitor name to see calculations.

Valuation 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 required rate of return and its actual rate of return. Microsoft Corp. P/BV ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.