Don't Buy Microsoft (MSFT) Before Checking Its Fundamentals!

Microsoft logged a 1.6% change during today's afternoon session, and is now trading at a price of $333.77 per share. On average, analysts give it a target price of $387.17.

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The large-cap company is based in the United States. Microsoft currently returns an annual dividend yield of 0.8%.

Make Sure to Consider the Following Before Buying Microsoft:

  • Microsoft has moved 33.0% over the last year.

  • MSFT has a forward P/E ratio of 26.4 based on its EPS guidance of 12.62.

  • Over the last 6 years, earnings per share (EPS) have been growing at a compounded average rate of 20.0%.

  • The company has a price to earnings growth (PEG) ratio of 2.08.

  • Its Price to Book (P/B) ratio is 12.03

Microsoft Has a Pattern of Improving Cash Flows

Date Reported Cash Flow from Operations ($ k) Capital expenditures ($ k) Free Cash Flow ($ k) YoY Growth (%)
2022-07-28 89,035,000 -23,886,000 112,921,000 18.11
2021-07-29 74,986,000 -20,622,000 95,608,000 31.51
2020-07-30 57,258,000 -15,441,000 72,699,000 9.97
2019-08-01 52,185,000 -13,925,000 66,110,000 19.08
2018-08-03 43,884,000 -11,632,000 55,516,000 16.54
2017-08-02 39,507,000 -8,129,000 47,636,000

Microsoft's free cash flow history is impressive because it displays year-on-year increases over the last 6 years. Averaging out at $75.08 Billion, and following a compounded average growth rate of 0.0%, investors who focus on cash flow growth should do further research on this firm.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

IN FOCUS