Microsoft shares declined -17.15% over the last 52 weeks, with a high of $312.88 and a low of $212.3. During this time, the stock lagged the S&P 500 index by -7.71%. As of January 2022, the company's 50-day average price is $246.53. Microsoft Corporation is an American multinational technology company which produces computer software, consumer electronics, personal computers, and related services. The large-cap Technology company is based in Redmond, WA. Microsoft has returned a 1.09% dividend yield over the last 12 months.
Exceptional EPS Growth with Low Leverage Levels:
|Gross Margins Growth||n/a||2.74%||1.2%||-0.95%|
|Operating Margins Growth||n/a||8.34%||11.78%||0.93%|
|Earnings Per Share||$5.13||$5.85||$8.15||$9.75|
|Diluted Shares (MM)||7,643||7,571||7,519||7,464|
|Free Cash Flow (MM)||$38,260||$45,234||$56,118||$65,149|
|Capital Expenditures (MM)||$13,925||$15,441||$20,622||$23,886|
|Net Debt / EBITDA||1.26||0.92||0.68||0.43|
Microsoft Is Reasonably Valued:
Compared to the Technology sector's average of 27.16, Microsoft has a trailing twelve month P/E ratio of 27.52 and, according to its EPS guidance of 10.74, an expected P/E ratio of 23.06.
Microsoft's P/B ratio is 11.05 compared to its sector average of 6.23. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 322.52% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 6.21 * 24.59) = $58.62
Microsoft's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
Microsoft Is the Subject of Mixed Market Indicators:
45 analysts are following Microsoft and have set target prices ranging from $212.0 to $348.0 per share. On average, they have given the company a rating of buy. At the current price of $247.68, MSFT is trading -13.47% away from its average analyst target price of $286.24 per share, implying an analyst consensus of some upside potential for the stock.