As of July 18, 2023, Microsoft Corp (MSFT, Financial) is experiencing a price change of 3.98%, with a current price of $359.49. The company's impressive market cap stands at $2.7 trillion, and its sales have reached a remarkable $207.6 billion. According to the GF Value, a unique indicator of a stock's intrinsic worth, Microsoft is fairly valued at $332.93.
Microsoft Corp (MSFT, Financial) is renowned for developing and licensing consumer and enterprise software. Its products, such as the Windows operating systems and Office productivity suite, are widely recognized. The company's business operations are divided into three broad segments: productivity and business processes, intelligence cloud, and more personal computing.
Microsoft's GF Value
The GF Value of Microsoft (MSFT, Financial) is calculated based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and estimates of future business performance. The GF Value Line represents the fair value at which the stock should ideally be traded. Currently, Microsoft's stock appears to be fairly valued with a GF Value of $332.93. This suggests that the long-term return of its stock is likely to be close to the rate of its business growth.
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Financial Strength of Microsoft
Investing in companies with strong financial strength reduces the risk of permanent capital loss. Microsoft's cash-to-debt ratio is 1.73, which, although lower than 57.59% of companies in the Software industry, still indicates strong financial health. The financial strength of Microsoft is ranked 8 out of 10 by GuruFocus.
Profitability and Growth of Microsoft
Microsoft has demonstrated consistent profitability over the past 10 years, with revenues of $207.6 billion and an EPS of $9.23 in the last 12 months. Its operating margin of 40.85% is better than 97.96% of companies in the Software industry. Furthermore, Microsoft's 3-year average revenue growth rate is better than 70.42% of companies in the industry, and its 3-year average EBITDA growth rate is 21.1%.
Microsoft's ROIC vs WACC
Microsoft's return on invested capital (ROIC) of 25.87 is significantly higher than its weighted average cost of capital (WACC) of 9.74, indicating that the company is creating value for shareholders.
Conclusion
In conclusion, Microsoft Corp (MSFT, Financial) appears to be fairly valued. The company's strong financial condition, impressive profitability, and robust growth make it a compelling consideration for investors. For more in-depth information about Microsoft's stock, check out its 30-Year Financials here.
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