Microsoft (MSFT)
Forward P/E 26.89x (SECONDARY) is only 1.12x the peer median of 23.95x, and trailing P/E 29.60x sits below Microsoft's ~31.4x 5-year and ~31.2-31.9x 10-year averages and inside its FY21-25 year-end range (26.48-38.51x). That modest premium is backed by primary-sourced latest-quarter revenue growth of +17.7% YoY at a 67.2% gross margin and a 19.06% 3-year EPS growth forecast — in line with peers and history, neither cheap nor stretched.
What would change this label: To UNDERVALUED if the forward multiple falls below ~22x (below the peer median) while revenue growth holds >=15% YoY; to OVERVALUED if the forward multiple expands above ~35x without EPS growth accelerating above ~20%, or if revenue growth slows below +10% YoY at an unchanged multiple.
Microsoft's shares cost about 27 times the profit expected next year, only a little more than similar big tech companies at about 24 times, and less than Microsoft itself has usually cost over the last ten years. Its sales are growing about 18% a year, which supports that price. It is not a bargain, but the price looks reasonable for what the business is delivering.
Both lines start at 100 on 2020-09-01. Over the full window Microsoft returned +133.79% and the S&P 500 +118.28% (price returns; dividends not reinvested). Worst peak-to-trough fall for Microsoft: -37.6% (2021-11-19 to 2022-11-03). Source: Nasdaq official daily history.
What the label rests on
Forward P/E 26.89x (SECONDARY) is only 1.12x the peer median of 23.95x, and trailing P/E 29.60x sits below Microsoft's ~31.4x 5-year and ~31.2-31.9x 10-year averages and inside its FY21-25 year-end range (26.48-38.51x). That modest premium is backed by primary-sourced latest-quarter revenue growth of +17.7% YoY at a 67.2% gross margin and a 19.06% 3-year EPS growth forecast — in line with peers and history, neither cheap nor stretched. The company’s forward P/E is 26.9× against a peer median of 23.9×. Its own history: Trailing P/E at fiscal year-ends FY21-FY25 ranged 26.48-38.51x (FY21 33.36x, FY22 26.48x, FY23 35.03x, FY24 38.51x, FY25 36.31x); 10-year average ~31.2-31.9x, 5-year average ~31.4x; current trailing 29.60x is below both averages (SECONDARY). Sector demand read: Sector demand rising, mid-cycle in the AI build-out; Microsoft is a primary beneficiary with delivered +17.7% YoY growth, though AI capex currently depresses FCF conversion. Latest-quarter sales growth was +17.7% versus a year earlier (SEC filings).
| Company | Price (Oct 27, 2026) | Forward P/E | Trailing P/E |
|---|---|---|---|
| Microsoft (MSFT) | $531.33 | 26.9× | 29.6× |
| AAPL | $347.10 | 37.9× | 39.8× |
| GOOGL | $320.58 | 23.9× | 16.1× |
| AMZN | $253.10 | 27.2× | 20.4× |
| META | $620.19 | 18.8× | 21.1× |
| ORCL | $130.53 | 15.3× | 20.5× |
| Peer median | 23.9× |
Multiples: stockanalysis.com (SECONDARY, S&P Global data), fetched Oct 28, 2026. Peer set chosen by sector; the median is the middle value of the set. The label and its numbers were recorded in the programme’s label registry on Oct 28, 2026 and will be scored at 6 and 12 months.
Sales, profit and cash
Gross margin = gross profit divided by sales, from SEC filings.
Free cash flow = cash from operations minus spending on plant and equipment, both from the company’s SEC cash-flow statement. Gaps are quarters where that spending line is not separately tagged in the filings — shown as gaps, never estimated.
| Quarter | Sales | Gross margin | Net income | EPS (GAAP, diluted) | Free cash flow |
|---|---|---|---|---|---|
| Q/E Jun 2026 2026-06-30 | $90.0B | 67.2% | $35.8B | — | $19.6B |
| Q/E Mar 2026 2026-03-31 | $82.9B | 67.6% | $31.8B | 4.27 | $15.8B |
| Q/E Dec 2025 2025-12-31 | $81.3B | 68.0% | $38.5B | 5.16 | $5.9B |
| Q/E Sep 2025 2025-09-30 | $77.7B | 69.0% | $27.7B | 3.72 | $25.7B |
| Q/E Jun 2025 2025-06-30 | $76.4B | 68.6% | $27.2B | — | $25.6B |
| Q/E Mar 2025 2025-03-31 | $70.1B | 68.7% | $25.8B | 3.46 | $20.3B |
| Q/E Dec 2024 2024-12-31 | $69.6B | 68.7% | $24.1B | 3.23 | $6.5B |
| Q/E Sep 2024 2024-09-30 | $65.6B | 69.3% | $24.7B | 3.30 | $19.3B |
| Q/E Jun 2024 2024-06-30 | $64.7B | 69.6% | $22.0B | — | $23.3B |
| Q/E Mar 2024 2024-03-31 | $61.9B | 70.1% | $21.9B | 2.94 | $21.0B |
| Q/E Dec 2023 2023-12-31 | $62.0B | 68.4% | $21.9B | 2.93 | $9.1B |
| Q/E Sep 2023 2023-09-30 | $56.5B | 71.2% | $22.3B | 2.99 | $20.7B |
The last twelve reported quarters. Full 24-quarter history sits in the data pack behind this page. A dash means the figure is not tagged as a standalone quarter in the company’s SEC facts (the usual case is the fourth quarter, which many companies only report inside the full-year filing) — it is missing, not zero.
Earnings: getting better or worse?
Each box is one quarter’s earnings per share (EPS). Green means EPS was higher than the same quarter a year earlier; red means lower; a dash means the figure is not tagged in the filings.
Basis: GAAP diluted EPS from SEC company facts, compared with the same quarter a year earlier.
Key facts
| Item | Value |
|---|---|
| Company (legal name in filings) | MICROSOFT CORP |
| Chief executive | Satya Nadella (source: https://www.morganstanley.com/insights/articles/microsoft-ceo-satya-nadella-ai-capex-tmt-conference) |
| Sector | Technology — Enterprise software, cloud infrastructure and AI platforms |
| Share price (Oct 27, 2026) | $531.33 |
| Market value (market cap) | $3.95T — share price times shares outstanding of 7,425,545,491 (SEC filings; SEC EDGAR dei EntityCommonStockSharesOutstanding (latest)) |
| Sales, last twelve months | $331.8B |
| Net income, last twelve months | $133.7B |
| Free cash flow, last twelve months | $67.0B |
| Latest reported quarter | Q/E Jun 2026 (of 24 quarters in the data pack) |
| Six-year price return vs S&P 500 | +133.79% vs +118.28% |
| Worst peak-to-trough fall | -37.6% (2021-11-19 to 2022-11-03) |
What we could not verify
- TTM GAAP diluted EPS could not be summed from company facts because at least one of the last four quarters (typically Q4) has no standalone tagged EPS; trailing P/E is therefore taken from the labelled secondary source in valuation_label.md.
- TTM GAAP diluted EPS could not be summed from SEC EDGAR company facts (standalone Q4 EPS not tagged); trailing P/E is from the labelled secondary source only
- Forward P/E by fiscal year from stockanalysis.com: ratios/financial-history pages fetched Oct 28, 2026 did not expose a forward-P/E-by-year row in text, and a follow-up open hit a browser 429 rate limit and was not retried; own-history context uses trailing period-end P/E from other named SECONDARY sources
- TTM capex of -$115.95B is stockanalysis.com SECONDARY; this run verified TTM FCF ($67.0B) and net income ($133.7B) from the primary EDGAR pack but did not separately re-derive TTM capex from EDGAR
- Guidance record (each quarter scored against the guidance the company gave the quarter before) is not yet compiled for this company — it is a Phase 2 layer. The earnings strip below therefore uses reported EPS versus a year earlier, which is fully sourced from filings.
The IT factor — the most exciting thing the market is overlooking — is not assessed on an X-Ray page. It belongs to the Deep Dive (Phase 2), where it gets the evidence standard it needs. Leadership-era scoring (the six years split by chief executive) is likewise a Phase 2 layer; this page names the current chief executive only, from a sourced profile.
Sources
- SEC EDGAR submissions — Filing index; company legal name.
https://data.sec.gov/submissions/CIK0000789019.json - SEC EDGAR company facts — Quarterly financial spine: revenue, gross profit, net income, GAAP diluted EPS, operating cash flow, PP&E capex, buybacks, dividends, diluted shares.
https://data.sec.gov/api/xbrl/companyfacts/CIK0000789019.json - Nasdaq official daily history — Daily closes for the company; SPY (assetclass=etf) saved as raw/nasdaq_spy_raw.json over identical dates.
https://api.nasdaq.com/api/quote/MSFT/historical?assetclass=stocks - Valuation multiples and peer figures — stockanalysis.com (SECONDARY, S&P Global data), fetched Oct 28, 2026; see valuation_label.md in the data pack.
Conventions: earliest-filed value per period, as first reported; cash-flow years-to-date differenced quarter by quarter; EPS never differenced; free cash flow = operating cash flow minus plant-and-equipment spending. This page is a dated snapshot — updates are new versions, never silent edits.