Microsoft Corp

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MSFT : NASDAQ : Technology
$71.21 | %
Today's Range: 69.92 - 71.25
Avg. Daily Volume: 2.44577E7
06/23/17 - 4:00 PM ET

Financial Analysis


MICROSOFT CORP's gross profit margin for the third quarter of its fiscal year 2017 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. MICROSOFT CORP is extremely liquid. Currently, the Quick Ratio is 2.67 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 6.78% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY17 Q3 FY16
Net Sales ($mil)22090.020531.0
EBITDA ($mil)8047.06990.0
EBIT ($mil)5594.05283.0
Net Income ($mil)4801.03756.0


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)126018.0105552.0
Total Assets ($mil)225017.0181869.0
Total Debt ($mil)84008.046394.0
Equity ($mil)69729.074806.0


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin74.6270.7
EBITDA Margin36.4234.04
Operating Margin25.3225.73
Sales Turnover0.390.48
Return on Assets7.915.76
Return on Equity25.5414.01
Debt Q3 FY17 Q3 FY16
Current Ratio2.812.9
Debt/Capital0.550.38
Interest Expense609.0340.0
Interest Coverage9.1915.54


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)7723.07870.0
Div / share0.390.36
EPS0.610.47
Book value / share9.039.51
Institutional Own % n/a n/a
Avg Daily Volume2.4365666E72.2846318E7

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 70.17 for the Software industry and a premium compared to the S&P 500 average of 25.75. For additional comparison, its price-to-book ratio of 7.78 indicates a significant premium versus the S&P 500 average of 3.09 and a discount versus the industry average of 9.04. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, MICROSOFT CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MSFT 31.09 Peers 70.17   MSFT 14.64 Peers 29.09

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

MSFT is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MSFT is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MSFT 21.23 Peers 44.61   MSFT 0.70 Peers 0.80

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

MSFT is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MSFT trades at a discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MSFT 7.78 Peers 9.04   MSFT 73.84 Peers 77.19

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MSFT is trading at a discount to its peers.

 

Average. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

MSFT is expected to keep pace with its peers on the basis of earnings growth.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MSFT 6.22 Peers 6.80   MSFT 0.41 Peers 8.69

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MSFT is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MSFT significantly trails its peers on the basis of sales growth

 

 

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