Rankings Software, cloud & internet Microsoft
Microsoft
77
15070100
A view of the same findings, not a new score. How it works
In the 70+ zone: a score above 70 with more than 20% upside to the median analyst target.
Biggest deductions
- Multiples vs own history and peers−9
- Cash flow and capex−6
- ROIC and capital intensity−3
Strengths
- Demand and guidance+3
- Buybacks+1
How the score is built
From 100 to 77, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 2 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 507.12 USD
- Median analyst target
- 630.00 USD
- Upside to median
- +24.2%
- Analysts
- 57
- Target range
- 440.00 – 870.00 USD
- 52-week change
- −2%
- P/E (trailing)
- 26.5
- Forward P/E
- 24.6
- PEG
- 1.54
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−6 of −30
- −3ROIC and capital intensityROIC has fallen every year: 61.9% (FY22), 45.6%, 38.5%, 32.5%, 29.3% (FY26) and 26.2% now. The FCF margin has fallen from 32.9% to 20.2%. The AI shift makes the business bigger but more capital-intensive.
- −2Quality of earningsQ4 EPS was lifted $0.33 by a $3.2bn gain on the Anthropic stake (33 of the 50-cent beat). At the same time, data-centre leases are now depreciated over 25 instead of 15 years, and the gross margin fell to 67% because of AI infrastructure costs.
- −1Weak segmentMore Personal Computing (Windows, Xbox, search) fell 4.4% in Q4 to $12.9bn because of pricier PCs and a tough Xbox comparison.
Price
Today's multiples against the company's own history and its peers. · 1 finding−9 of −35
- −9Multiples vs own history and peersP/E 28.4 vs 20.7–37.7 in FY22–26 (average 31.2; the previously cited 32.8 does not match the table); forward 25.8 vs 20.1–35.4; EV/EBITDA 19.7 vs 14.5–25.9. But P/FCF of 56 vs 29.5–51.6 is the highest in five years, and the share price is +37% since 30/6. PEG of 1.6 is not scored here.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 4 findings−12 of −35
- −6Cash flow and capexFCF fell 6.5% to $67.0bn in FY26 (Q4 −23%) as capex rose 80% to $115.9bn. Capex is guided at about $50bn per quarter in Q1 FY27 and about $175bn in calendar 2026 (cut from about 190bn).
- −3OpenAI dependenceOpenAI has committed to a further $250bn of Azure purchases, a large part of the $678bn commercial backlog. Microsoft owns about 27% of OpenAI Group but has lost its right of first refusal as compute supplier.
- −2Execution (capacity)Azure capacity shortages are expected to continue into FY27 despite record capex; that limits growth and requires even more investment.
- −1DebtNet debt $52bn (debt of $128.8bn incl. leases vs cash of $76.8bn), but only about 0.3x EBITDA.
Plus
Only documented strengths. · 2 findings+4 of +15
- +3Demand and guidanceAzure +43% in Q4 (above guidance of 39–40%) and over $100bn a year; Q1 is guided at about 45% vs consensus of 41.4%. The commercial backlog is $678bn (+84%), and Copilot has over 30m paid seats.
- +1BuybacksBuybacks ($22.3bn) plus dividends ($26.4bn) = $48.7bn in FY26, below FCF of $67.0bn; share count −0.16%, and the dividend has risen for 20 years.
Caveats
What the score does not capture, or where the data is weak.
The price has risen from $372 (30/6) to about $509, and P/FCF is the highest in five years. Capex is about $50bn per quarter, and profit is lifted by longer depreciation lives on data centres and a $3.2bn gain on the Anthropic stake. OpenAI is a large part of the order book. Regulation (FTC/EU) and insider trading have not been examined.
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