Microsoft Corp. (NASDAQ:MSFT) 

Price to earnings (P/E) ratio

The Price to Earnings ratio displayed a moderate fluctuation over the examined period. Starting at 35.04 in mid-2020, it remained relatively stable into mid-2021 at 35.14, then decreased significantly to 28.34 by mid-2022. Subsequently, it followed an upward trajectory, rising to 33.96 in mid-2023 and continuing to increase to 37.46 by mid-2025. This trend suggests an initial undervaluation or improved earnings performance in 2022, followed by increased market valuation relative to earnings in later years.

Price to operating profit (P/OP) ratio

The Price to Operating Profit ratio exhibited a pattern similar to that of the P/E ratio but with generally lower values. It began at 29.3 in mid-2020, increased to a peak of 30.79 in mid-2021, then declined to 24.72 in mid-2022. Afterwards, the ratio rose steadily from 27.76 in mid-2023 to 29.68 by mid-2025. The movement reflects comparable valuation shifts relative to operating profitability, with a notable dip in mid-2022 followed by recovery and growth.

Price to sales (P/S) ratio

The Price to Sales ratio demonstrated a predominantly upward trend with some variation. Starting at 10.85 in mid-2020, it rose sharply to 12.81 in mid-2021 before declining to 10.4 in mid-2022. From mid-2022 onwards, the ratio increased steadily to 13.54 by mid-2025, reaching the highest observed value within the period. This indicates strengthening market valuation relative to sales over time, particularly after the mid-2022 low point.

Price to book value (P/BV) ratio

Contrary to the other valuation ratios, the Price to Book Value ratio trended downward over the review period. Beginning at 13.11 in mid-2020, it rose to 15.16 in mid-2021 but then declined continuously through subsequent years, reaching 11.11 by mid-2025. This decline suggests diminishing market value in relation to the company's book value, indicating possible adjustments in investor perception of net asset value or changes in equity composition.

The financial data reveals several notable trends over the period from June 30, 2020, to June 30, 2025. The share price exhibited a consistent upward trajectory, increasing substantially from $205.01 to $513.24. This reflects a strong appreciation in market value over the five-year span.

Earnings per share (EPS) also demonstrated a positive trend, rising steadily from $5.85 in 2020 to $13.70 in 2025. The EPS growth indicates improving profitability on a per-share basis, suggesting enhanced operational performance or increased net income relative to shares outstanding.

The price-to-earnings (P/E) ratio showed some variability but remained within a relatively narrow range. Starting at approximately 35.04 in 2020, the ratio dipped to 28.34 in 2022, which may imply a period during which share prices grew more slowly relative to earnings or earnings grew faster than share prices. Subsequently, the P/E ratio increased again, reaching 37.46 by 2025, which could indicate heightened investor confidence or anticipated future growth driving higher valuation multiples.

Overall, the data reflects a favorable financial condition characterized by robust growth in share price and EPS, coupled with a generally elevated P/E ratio that suggests sustained investor optimism regarding the company’s earnings prospects.

Share Price Trend

The share price exhibits a consistent upward trajectory over the observed periods. Starting at $205.01 on June 30, 2020, it increased significantly to $286.50 by June 30, 2021. Although there was a slight decline to $276.41 in June 2022, the price subsequently resumed its ascent, reaching $330.72 in June 2023 and advancing further to $422.92 and $513.24 in June 2024 and June 2025, respectively. This pattern indicates robust market confidence and strong valuation growth over the five-year span.

Operating Profit Per Share

Operating profit per share demonstrates a steady and marked improvement across the periods. Starting from $7.00 in June 2020, there is a progressive increase each year: $9.30 in June 2021, $11.18 in June 2022, $11.91 in June 2023, $14.72 in June 2024, and culminating at $17.29 in June 2025. This consistent upward trend signals enhanced operational efficiency and profitability on a per-share basis, reflecting positively on the company’s core earnings capacity.

Price to Operating Profit Ratio (P/OP)

The price to operating profit ratio exhibits some variability but remains within a relatively stable range. Initially, the ratio is 29.3 in June 2020, slightly increasing to 30.79 in June 2021. It then decreases noticeably to 24.72 in June 2022, suggesting a more attractive valuation relative to operating profit in that period. Following this dip, the ratio climbs again to 27.76 in June 2023, 28.73 in June 2024, and 29.68 in June 2025. Overall, these changes imply fluctuating investor sentiment regarding the price paid per unit of operating profit, with a noteworthy undervaluation in June 2022 relative to the surrounding years.

Summary

The data indicates strong growth in both share price and operating profit per share over the five-year period, accompanied by some fluctuations in valuation multiples. The operating profit per share rise suggests improving business performance, while the share price increase reflects positive investor perception. The movement in the P/OP ratio hints at changing market evaluations of the company’s profitability, with a period of relative undervaluation in 2022 before returning closer to prior levels.

Share Price

The share price exhibits a consistent upward trajectory over the periods analyzed. Starting at $205.01 in mid-2020, it rose significantly to $286.50 by mid-2021, then experienced a slight decline to $276.41 in mid-2022. From this point, the price resumed its upward trend, reaching $330.72 in mid-2023, followed by even steeper increases to $422.92 in mid-2024 and $513.24 in mid-2025. This overall growth reflects a robust market valuation trend with a notably strong acceleration in the last two years.

Sales Per Share

Sales per share demonstrates a steady and continuous increase throughout the entire period. Beginning at $18.90 in mid-2020, it climbed progressively each year, reaching $22.37 in 2021, $26.59 in 2022, $28.52 in 2023, $32.98 in 2024, and culminating at $37.90 in mid-2025. This consistent rise highlights an improving revenue generation capability on a per-share basis, indicating growth in underlying sales performance.

Price-to-Sales (P/S) Ratio

The price-to-sales ratio shows some fluctuations but an overall increasing pattern. Initially, the ratio was 10.85 in mid-2020, rose to 12.81 in mid-2021, dipped to 10.40 in mid-2022, then increased again to 11.60 in mid-2023. The ratio accelerated further to 12.82 in 2024 and 13.54 by mid-2025. The recent upward trend suggests that investor valuation relative to sales has been becoming more optimistic, reflecting increased market confidence and possibly expectations of future growth, despite minor volatility in earlier years.

Overall Insights

The data indicates strong growth in both market valuation and sales performance over the five-year span. While sales per share show a stable and consistent upward trend, the share price growth accelerates more rapidly, particularly in the last two years. The increasing P/S ratio corroborates a rising investor appetite, implying that the market is valuing the company not only based on current sales growth but also on anticipated future performance. The slight fluctuations in P/S suggest episodic adjustments in valuation, but the overarching trend points to strengthening financial health and market confidence.

Share Price

The share price exhibited a consistent upward trend over the periods analyzed. Starting at $205.01 on June 30, 2020, it increased sharply to $286.50 by June 30, 2021, followed by a slight decline to $276.41 in June 2022. Subsequent periods show a strong recovery and growth, reaching $330.72 in June 2023, $422.92 in June 2024, and culminating at $513.24 by June 2025. This indicates significant investor confidence and market appreciation over the five-year period.

Book Value per Share (BVPS)

The book value per share showed a continuous and steady increase across all periods. Starting at $15.63 in June 2020, it rose to $18.89 in 2021, $22.33 in 2022, $27.76 in 2023, $36.12 in 2024, and reached $46.21 by June 2025. This growth signifies an effective accumulation of net assets or retained earnings relative to the number of outstanding shares.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio fluctuated moderately but demonstrated a gradual decline throughout the analyzed years. Initially, it peaked at 15.16 in June 2021 after starting from 13.11 in June 2020. Thereafter, the ratio decreased to 12.38 in June 2022, continuing down to 11.92 by June 2023, further slightly declining to 11.71 in 2024, and reaching 11.11 by June 2025. This downward trend indicates that while the share price increased, the book value grew at a comparatively faster rate, potentially implying improved underlying asset values relative to the market price.

Overall Insights

The combined trends suggest strong financial growth with increasing intrinsic value as confirmed by the rising book value per share, alongside robust market performance indicated by the increasing share price. The decreasing P/BV ratio over time may reflect a market recalibration where the stock is becoming relatively more reasonably priced in terms of its book value. The data points to a company that has consistently enhanced its asset base and generated value for shareholders, while maintaining healthy market valuation metrics.