NASDAQ · MSFT

Microsoft Corporation

Technology · Software - Infrastructure

$492.44▲ 0.16% ($0.79)at close

After hours$490.09▼ 0.48%6:34 PM ET

52-week

$349.20$553.72

What the market price implies · Reverse DCF

To support a price of $492.44, this model requires revenue to grow by 22.1%/yr over the next 10 years, compounded annually.

Historical revenue grew by 13.74%/yr over the past 4 years. The required annual growth rate is 8.36 percentage points higher.

Selected forecast · Base scenario

10.02%/yr · actual 10-year annualized revenue growth

Year 1 growth: 15.72%

Market-implied · Base operating assumptions + edited margins

22.1%/yr · flat 10-year annualized revenue growth

Reverse DCF solves revenue growth itself using Base operating assumptions and your edited margins. Changing forecast growth alone does not change the implied rate. This is a model-implied requirement, not an analyst forecast.

Valuation

Recommended · Revenue & margin DCF

Price used

$492.44

Estimated value / share

$215.44

Base scenario

This estimate is 56.25% below the price used.

USD · TTM ending 2026-06-30

Year 1 growth 15.72% · Ending margin 30% · Discount rate 10.99%

Assumption scenarios, not statistical confidence intervals.

Method, dates & sources

Estimated from future revenue, operating margins, and the investment needed to support them.

Price timestamp: Sep 10, 2026, 8:00 PM UTC
Financial statement period: TTM ending 2026-06-30
Data refreshed: Sep 10, 2026, 10:35 PM UTC · provider

Why this method?

FCFF is positive, but the series is too unstable to anchor a direct cash-flow CAGR and the business still fails the steady-state comparability checks. Use a revenue-and-margin transition model instead of normalizing and compounding current FCFF.

Is FCFF positive and has it been for 3+ consecutive years? 30 consecutive positive FCFF years are available.

Is FCFF stable (not swinging >30% year to year)? The largest recent FCFF swing is 38.9%. Latest capex is 3.2x the prior median, which points to a capex supercycle that should be normalized first.

Do you have 5+ years of positive FCFF history? 30 consecutive positive FCFF years are available.

Is the business model structurally similar to what it should be in 10 years? Revenue is still growing 17.7%, above the 15.0% maturity threshold, so a steady-state FCFF model would lean too heavily on a business still scaling.

Price vs Fundamentals

Why The Stock Is Moving

Mixed / unclearLow confidence

1Y Price: -1.36%Revenue (TTM): 17.79%FCF (TTM): -6.46%P/FCF: 100th pct

What changed

The stock fell 1.36% over the last year. Revenue grew 17.79% over the trailing twelve months. Operating margin moved from 45.62% to 46.78%. Free cash flow declined 6.46% over the trailing twelve months.

What the market seems to be pricing

The stock has moved lower against modestly improving underlying metrics. The operating data does not yet tell a clear story — the move may reflect sentiment, sector rotation, or macro factors rather than company-specific earnings power.

What would invalidate this read

Operating margin currently stands at 46.78%. A decisive move in revenue — currently up 17.79% — would be the clearest signal to resolve the ambiguity.

Performance

Return analysis

Company profile

Microsoft Corporation is a prominent global technology firm that invents, markets, and provides ongoing assistance for a diverse range of software, digital services, computing devices, and comprehensive solutions.

CEOSatya Nadella

SectorTechnology

IndustrySoftware - Infrastructure

Employees223,000

IPO dateMar 13, 1986

https://www.microsoft.com

Market multiples

Forward P/E—

EV/EBITDA13.87

Enterprise value$2.88T

Stock splits

Feb 18, 2003↑ Forward

Every 1 shares became 2

+100%

Mar 29, 1999↑ Forward

Every 1 shares became 2

+100%

Feb 23, 1998↑ Forward

Every 1 shares became 2

+100%

Dec 9, 1996↑ Forward

Every 1 shares became 2

+100%

May 23, 1994↑ Forward

Every 1 shares became 2

+100%

Jun 15, 1992↑ Forward

Every 2 shares became 3

+50%

Jun 27, 1991↑ Forward

Every 2 shares became 3

+50%

Apr 16, 1990↑ Forward

Every 1 shares became 2

+100%

Profitability & growth

Revenue growth17.75%

Gross margin67.94%▼0.9ppvs FY2025

Operating margin46.78%▲1.2ppvs FY2025

ROE34.04%▲0.8ppYoY

Analyst consensus

RatingBuy

Target price$553.39▲12.38%

Buy

Hold

Sell

Analyst ratings tend to be lagging indicators. Use as one signal among many.

Earnings

Full quarter-by-quarter history of actuals vs estimates. Switch into compare mode to inspect one metric year-over-year.

Next report

Oct 28, 2026

Q4 FY26 · EPS est $4.67 · Revenue est $90.59B

View

Dividends

$3.64/shareQuarterlyDividend Achiever · 20yrSafe

MSFT pays a dividend with a 0.74% dividend yield, 20 consecutive years of growth, growing at 10.2% annually, covered 2.5× by free cash flow.

Dividend Yield

0.74%

Annual Div / Share

$3.64

5yr CAGR

+10.2%

Doubles every ~7.1yr

Payout Ratio

19.77%

Safe

Dividend Growth Rate

3yr CAGR

+10.2%

5yr CAGR

+10.2%

10yr CAGR

+9.72%

Dividend Safety

10/10Safe

Dividend History

Annualized dividend cycles per share

YearAnnual DivYoY

2026$3.64+9.6%

2025$3.32+10.7%

2024$3.00+10.3%

2023$2.72+9.7%

2022$2.48+10.7%

2021$2.24+9.8%

2020$2.04+10.9%

Income Projection

Invest

Growth rate:

Reinvest dividends

Today

$7/yr

$1/mo

In 5 yrs

$12/yr+63%

$1/mo

In 10 yrs

$20/yr+164%

$2/mo

Today	In 5 yrs	In 10 yrs
$7/yr $1/mo	$12/yr+63% $1/mo	$20/yr+164% $2/mo

Yield-on-cost grows from 0.74% → 1.95% over 10yr

Analysis

Dividend Strengths

Dividend Achiever

MSFT has raised its dividend for 20 consecutive years — qualifying as a Dividend Achiever, demonstrating long-term commitment to shareholder income.

Well-covered by free cash flow

The dividend is covered 2.5× by free cash flow, indicating the company generates sufficient cash to sustain and potentially grow the payout without straining its finances.

Strong dividend growth rate

The 5-year CAGR of 10.2% meaningfully outpaces inflation, compounding real income growth for long-term holders.

Risks to Watch

No strong risk signal stands out from the latest period pair.

NASDAQ · MSFT

Microsoft Corporation

Technology · Software - Infrastructure

$492.44▲ 0.16% ($0.79)at close

After hours$490.09▼ 0.48%6:34 PM ET

52-week

$349.20$553.72

What the market price implies · Reverse DCF

To support a price of $492.44, this model requires revenue to grow by 22.1%/yr over the next 10 years, compounded annually.

Historical revenue grew by 13.74%/yr over the past 4 years. The required annual growth rate is 8.36 percentage points higher.

Selected forecast · Base scenario

10.02%/yr · actual 10-year annualized revenue growth

Year 1 growth: 15.72%

Market-implied · Base operating assumptions + edited margins

22.1%/yr · flat 10-year annualized revenue growth

Valuation

Recommended · Revenue & margin DCF

Price used

$492.44

Estimated value / share

$215.44

Base scenario

This estimate is 56.25% below the price used.

USD · TTM ending 2026-06-30

Year 1 growth 15.72% · Ending margin 30% · Discount rate 10.99%

Assumption scenarios, not statistical confidence intervals.

Method, dates & sources

Estimated from future revenue, operating margins, and the investment needed to support them.

Price timestamp: Sep 10, 2026, 8:00 PM UTC
Financial statement period: TTM ending 2026-06-30
Data refreshed: Sep 10, 2026, 10:35 PM UTC · provider

Why this method?

Is FCFF positive and has it been for 3+ consecutive years? 30 consecutive positive FCFF years are available.

Is FCFF stable (not swinging >30% year to year)? The largest recent FCFF swing is 38.9%. Latest capex is 3.2x the prior median, which points to a capex supercycle that should be normalized first.

Do you have 5+ years of positive FCFF history? 30 consecutive positive FCFF years are available.

Price vs Fundamentals

Why The Stock Is Moving

Mixed / unclearLow confidence

1Y Price: -1.36%Revenue (TTM): 17.79%FCF (TTM): -6.46%P/FCF: 100th pct

What changed

What the market seems to be pricing

What would invalidate this read

Operating margin currently stands at 46.78%. A decisive move in revenue — currently up 17.79% — would be the clearest signal to resolve the ambiguity.

Performance

Return analysis

Company profile

CEOSatya Nadella

SectorTechnology

IndustrySoftware - Infrastructure

Employees223,000

IPO dateMar 13, 1986

https://www.microsoft.com

Market multiples

Forward P/E—

EV/EBITDA13.87

Enterprise value$2.88T

Stock splits

Feb 18, 2003↑ Forward

Every 1 shares became 2

+100%

Mar 29, 1999↑ Forward

Every 1 shares became 2

+100%

Feb 23, 1998↑ Forward

Every 1 shares became 2

+100%

Dec 9, 1996↑ Forward

Every 1 shares became 2

+100%

May 23, 1994↑ Forward

Every 1 shares became 2

+100%

Jun 15, 1992↑ Forward

Every 2 shares became 3

+50%

Jun 27, 1991↑ Forward

Every 2 shares became 3

+50%

Apr 16, 1990↑ Forward

Every 1 shares became 2

+100%

Profitability & growth

Revenue growth17.75%

Gross margin67.94%▼0.9ppvs FY2025

Operating margin46.78%▲1.2ppvs FY2025

ROE34.04%▲0.8ppYoY

Analyst consensus

RatingBuy

Target price$553.39▲12.38%

Buy

Hold

Sell

Analyst ratings tend to be lagging indicators. Use as one signal among many.

Earnings

Full quarter-by-quarter history of actuals vs estimates. Switch into compare mode to inspect one metric year-over-year.

Next report

Oct 28, 2026

Q4 FY26 · EPS est $4.67 · Revenue est $90.59B

View

Dividends

$3.64/shareQuarterlyDividend Achiever · 20yrSafe

MSFT pays a dividend with a 0.74% dividend yield, 20 consecutive years of growth, growing at 10.2% annually, covered 2.5× by free cash flow.

Dividend Yield

0.74%

Annual Div / Share

$3.64

5yr CAGR

+10.2%

Doubles every ~7.1yr

Payout Ratio

19.77%

Safe

Dividend Growth Rate

3yr CAGR

+10.2%

5yr CAGR

+10.2%

10yr CAGR

+9.72%

Dividend Safety

10/10Safe

Dividend History

Annualized dividend cycles per share

YearAnnual DivYoY

2026$3.64+9.6%

2025$3.32+10.7%

2024$3.00+10.3%

2023$2.72+9.7%

2022$2.48+10.7%

2021$2.24+9.8%

2020$2.04+10.9%

Income Projection

Invest

Growth rate:

Reinvest dividends

Today

$7/yr

$1/mo

In 5 yrs

$12/yr+63%

$1/mo

In 10 yrs

$20/yr+164%

$2/mo

Today	In 5 yrs	In 10 yrs
$7/yr $1/mo	$12/yr+63% $1/mo	$20/yr+164% $2/mo

Yield-on-cost grows from 0.74% → 1.95% over 10yr

Analysis

Dividend Strengths

Dividend Achiever

MSFT has raised its dividend for 20 consecutive years — qualifying as a Dividend Achiever, demonstrating long-term commitment to shareholder income.

Well-covered by free cash flow

The dividend is covered 2.5× by free cash flow, indicating the company generates sufficient cash to sustain and potentially grow the payout without straining its finances.

Strong dividend growth rate

The 5-year CAGR of 10.2% meaningfully outpaces inflation, compounding real income growth for long-term holders.

Risks to Watch

No strong risk signal stands out from the latest period pair.