Microsoft Corp (MSFT, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $427.4, Microsoft Corp has witnessed a daily loss of 0.72%, marked against a three-month change of 4.35%. A thorough analysis, underlined by the GF Score, suggests that Microsoft Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
GuruFocus assigned Microsoft Corp a GF Score of 97 out of 100, which signals the highest outperformance potential.
Understanding Microsoft Corp Business
Microsoft Corp, with a market cap of $3.18 trillion and sales of $236.58 billion, is a leader in the technology sector. The company is known for its Windows operating systems and Office productivity suite. It is organized into three broad segments: productivity and business processes, intelligence cloud, and more personal computing. This diversification across different technology domains allows Microsoft to maintain a strong market position and leverage cross-platform capabilities.
Financial Strength Breakdown
Microsoft Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio stands impressively at 38.94, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 10.06, Microsoft Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. The favorable Debt-to-Revenue ratio of 0.34 solidifies its financial health.
Profitability Rank Breakdown
Microsoft Corp's impressive profitability is evidenced by its consistent increase in Operating Margin over the past five years, reaching 41.77% in 2023. The company's Gross Margin has also seen a consistent rise, reaching 68.92% in 2023. These trends underscore the company's growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms Microsoft Corp's solid financial situation, and its strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance.
Growth Rank Breakdown
Microsoft Corp demonstrates a strong commitment to expanding its business, with a 3-Year Revenue Growth Rate of 15.1%, outperforming 65.16% of companies in the Software industry. The robust increase in EBITDA over the past few years further accentuates the company's continued capability to drive growth.
Conclusion
Considering Microsoft Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
