D/E 0.30 — near the Technology debt median (≈60th pctile)
P/E22.8xB+
P/E 22.8 — below the Technology median (≈40th pctile)
PEG1.19B+
PEG 1.19 — near fair value, classic Lynch benchmark (1.0)
Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.
Quality-growth score · 78.7
Quality0.88
Growth0.88
Value0.63
Why this score
Raising its dividend
Durable high returns
Entry · Margin of safety
52-week rangeNear 52-week low
31% off the 12-month high
vs DCF fair value125% aboveest. fair value ~$171
Quality signals · context only
Gross profitability31% · B+gross profit ÷ total assets (Novy-Marx)
ROIC25.9% · Areturn on invested capital — not score-weighted
Why now
Microsoft's unparalleled ecosystem in the Productivity and Business Processes segment, fueled by mission-critical offerings like Microsoft 365 commercial, Teams, and Copilot, is driving exceptional compounding. With a robust 14.9% FY YoY revenue growth and an impressive $72.9b in TTM free cash flow, the company demonstrates its ability to monetize its vast user base and expand into new AI-driven capabilities. The relatively modest 1.19 PEG ratio for a company with a 39.3% profit margin suggests this growth is still reasonably valued, with continued adoption of its integrated cloud services as the primary catalyst.
Moat
Microsoft's durable edge stems from the deep integration and ubiquity of its Productivity and Business Processes segment offerings, including Windows commercial, Microsoft 365, and Dynamics 365, which create formidable switching costs for enterprise customers. This ecosystem fosters a powerful network effect, making it difficult for competitors to dislodge. The company's exceptional 30.2% ROE is a direct result of its category leadership and pricing power derived from these mission-critical, deeply embedded software and cloud solutions.
Risk
The primary bear case against Microsoft centers on its colossal $2.8T market cap and the potential for growth deceleration, which is not fully reflected in its elevated 8.9 PS TTM ratio. While revenue growth remains strong, the sheer scale makes sustaining the current 14.9% rate increasingly challenging, especially given its beta of 1.13 which suggests sensitivity to broader market shifts. A sustained, material slowdown in cloud services adoption within the Productivity and Business Processes segment, leading to revenue growth consistently below current levels, would confirm the bear's thesis and pressure the valuation.
Horizon
1-3 yr $559.93 (55-analyst consensus) — fundamentals + valuation re-rating. 5 yr $819.80 at ~16% CAGR — compounding case rests on the competitive position widening. 10 yr $1,216 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Position sizing · MSFT
$
%
%
Shares to buy
5
Position size
$1,922
3.8% of portfolio
Stop price
$288.27
25% below $384.36
$ at risk if stopped
$480.45
budget $500.00 · 1% of portfolio
Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.
Microsoft Corporation (MSFT): score, valuation & FAQ
Microsoft Corporation (MSFT) is a Software - Infrastructure company that scores 78.7 out of 100 on the Bull Rankings quality-growth model — a strong reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.
Its strongest graded signals are FCF (A), Rev (B+) and P/E (B+). On valuation, MSFT sits about 125% above our discounted-cash-flow fair value (i.e. the DCF flags it as rich).
Is MSFT a good stock to buy?
Bull Rankings scores MSFT 78.7 out of 100 on its quality-growth model, which is a strong reading. That is driven by FCF (A), Rev (B+) and P/E (B+). A score is a quantitative screen of Microsoft Corporation's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.
Why does MSFT score 78.7 on Bull Rankings?
The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). MSFT earns its highest marks on FCF (A), Rev (B+) and P/E (B+). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.
Is MSFT overvalued or undervalued?
Based on $384.36, MSFT sits about 125% above our discounted-cash-flow fair value (i.e. the DCF flags it as rich). It trades at a 22.8x× P/E (graded B+). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.
What are the main risks of investing in MSFT?
The primary bear case against Microsoft centers on its colossal $2.8T market cap and the potential for growth deceleration, which is not fully reflected in its elevated 8.9 PS TTM ratio. While revenue growth remains strong, the sheer scale makes sustaining the current 14.9% rate increasingly challenging, especially given its beta of 1.13 which suggests sensitivity to broader market shifts. A sustained, material slowdown in cloud services adoption within the Productivity and Business Processes segment, leading to revenue growth consistently below current levels, would confirm the bear's thesis and pressure the valuation.
Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.