Microsoft Corporation (MSFT) fair value: what the stock is really worth
We calculate from audited financials what Microsoft Corporation is really worth. The fair value tells you whether the price is too high or too low, the quality score (0 to 100) how solid the business behind it is. 26 models, 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Sep 17, 2026.
How to read this chart
60‑month range $207.73 – $538.66 · fair‑value band $316.59 – $791.21 · the $501.61 price screens below the $546.83 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Sep 17, 2026.
Microsoft Corporation develops and supports software, services, devices, and solutions worldwide.
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Microsoft Corporation develops and supports software, services, devices, and solutions worldwide. The Productivity and Business Processes segment offers Microsoft 365 commercial, enterprise mobility + security, windows commercial, power BI, exchange, sharepoint, Microsoft teams, security and compliance, and copilot; Microsoft 365 commercial products, such as Windows commercial on-premises and office licensed services; Microsoft 365 consumer products and cloud services, including Microsoft 365 consumer subscriptions, office licensed on-premises, and other consumer services; LinkedIn; dynamics products and cloud services, such as dynamics 365, cloud-based applications, and on-premises ERP and CRM applications. Its Intelligent Cloud segment provides Server products and cloud services comprising Azure and other cloud services, GitHub, Nuance Healthcare, virtual desktop offerings, and other cloud services; server products, including SQL and windows server, visual studio and system center related client access licenses, and other on-premises offerings; enterprise and partner services, such as enterprise support and nuance professional services, industry solutions, Microsoft partner network, and learning experience. The Personal Computing segment provides windows and devices, such as Windows OEM licensing and devices and surface and PC accessories; gaming services and solutions, such as Xbox hardware, content, and services, first- and third-party content Xbox game pass, subscriptions, and cloud gaming, advertising, and other cloud services; search and news advertising services. It sells its products through OEMs, distributors, and resellers; and online and retail stores. The company has a strategic collaboration with Mayo Clinic, Inc. for the development of a frontier AI model for healthcare; and Global Objects, Inc. to build a retrieval-grounded generative AI world model. The company was founded in 1975 and is headquartered in Redmond, Washington.
Stock analysis
Microsoft Corporation (MSFT) currently trades at $501.61, while our model-based Fair Value estimate is $546.83, implying the stock looks roughly 8.3% fairly valued today.
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Valuation
Bull case: the Growth Earnings group reads highest at a median of $331.60 per share, and 0 of the 26 models we run sit above the $501.61 price.
Bear case: the Dividend Discount group reads lowest at $55.77, and 26 of the 26 models stay below the price. Evidence for this calculation is high.
Scenario range: $316.59 (bear) to $791.21 (bull), the price of $501.61 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 66/100 (solid quality), in the Technology sector.
Expensive Growth: The company is growing, but growth may require heavy reinvestment or weak cash conversion.
Microsoft Corporation reported revenue of $282B in FY2025 versus $168B in FY2021, a compound +13.8%/yr. Reported net income was $102B in FY2025, compounding +13.5%/yr from FY2021.
Key figures
Market cap $3.7T · P/E ratio 29.9 · P/S ratio 10.8 · EPS (TTM) $16.79 · Dividend yield 0.7% · Net margin 36.1% · Return on equity 34.0% · Return on assets (EBIT) 21.5%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 78 out of 100 (high confidence).
What moves the price
The share trades about 9% below its 52-week high and 41% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Technology peers we cover trades at −19% fair-value upside, at 9%, MSFT screens cheaper than that median.
Fair Value models
Bear $316.59Fair Value $546.83Bull $791.21
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above is their evidence-weighted blend, not the output of a single model. Based on fiscal year 2025 figures (about 12 months old). Earnings retained since then ($13.22 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target.Evidence ⓘEvidence = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.62/100
The company is growing, but growth may require heavy reinvestment or weak cash conversion.
Revenue growth 1 year
+14.9%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+12.4%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+14.5%
Revenue growth 39 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+20.5%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+19.5%
Earnings growth per share plus dividend.
Earnings per share, growth per year+18.8%
Dividend (yield on the price)0.7%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.19% vs 18%, steady
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.37% → 46%
Growth Forecast
A lot of optimism in the price
The price assumes more growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+25.1%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+14.6%
Yearly sales growth analysts expect, extended to five years.
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Software - Infrastructure · 376 stocks
Beats the industry median on 8/15 measures
A mixed picture versus its industry peers.
Valuation
Quality Score66 · Top 25%
Fair Value upside−24% · Below median
Profitability
Return on equity (TTM)34% · Top 25%
Return on assets15% · Top 25%
Net margin (TTM)39% · Top 25%
Operating margin (TTM)46% · Top 25%
Growth and dividend
Revenue growth18% · Above median
Dividend yield (TTM)0.7% · Below median
Balance sheet
Debt / equity0.12× · Above median
Valuation Multiplesvs Software - Infrastructure median · lower = cheaper
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Microsoft Corporation Fair Value". https://www.fairvalue-calculator.com/stock/MSFT
Frequently asked questions
Is Microsoft Corporation (MSFT) overvalued or undervalued?
As of Sep 17, 2026, our model estimates a fair value of $546.83 versus a price of $501.61, about +9% upside (fairly valued).
What is the fair value of MSFT?
Our model-based fair value for Microsoft Corporation is $546.83 (as of Sep 17, 2026), built from audited fundamentals. The current price: $501.61.
What is the quality score of MSFT?
Microsoft Corporation has a Quality Score of 66/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Microsoft Corporation (MSFT)?
Our model-based price target is the fair value of $546.83 (as of Sep 17, 2026) from 26 valuation models. Cautious scenario $316.59, optimistic scenario $791.21. It is a calculation from audited fundamentals, not an analyst target.
What is the Microsoft Corporation stock forecast for 2026?
Our models put fair value at $546.83, about +9% upside versus a price of $501.61 (fairly valued). Cautious scenario $316.59, optimistic scenario $791.21. The calculation is refreshed regularly with new filings.
What is the revenue of Microsoft Corporation (MSFT)?
Microsoft Corporation reported trailing-twelve-month revenue of about $318B (latest available figure, as of Sep 17, 2026).
Does Microsoft Corporation pay a dividend?
Microsoft Corporation currently shows a dividend yield of about 0.71% relative to its recent price (as of Sep 17, 2026).
What growth is priced into Microsoft Corporation (MSFT)?
For today's price to be fair in a discounted-cash-flow model, Microsoft Corporation would have to grow free cash flow by +25.1 % per year for five years (discount rate 9.0 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +14.5 % per year. As of Sep 17, 2026.
What discount rate (WACC) does the fair value of MSFT use?
Our models discount Microsoft Corporation at 9.0 %: a base by market capitalisation (mega), damped by beta 1.13, country premium for USA. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Microsoft Corporation that is +25.1 % per year a year over ten years, using the same discount rate (9.0 %) and the same formula as our fair value.
How much growth has Microsoft Corporation (MSFT) delivered so far?
Over the past 5 years revenue at Microsoft Corporation grew +14.5 % a year. The price currently implies +25.1 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Microsoft Corporation (MSFT) growing?
The median revenue growth in the sector is +8.0 % a year. That is the yardstick for the growth priced into Microsoft Corporation (+25.1 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Microsoft Corporation (MSFT)?
The free-cash-flow yield on the price is 1.94 %: that much free cash flow Microsoft Corporation produces per unit of market value. When it exceeds the discount rate of our models (9.0 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Microsoft Corporation (MSFT)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Microsoft Corporation it is $546.83 per share (as of Sep 17, 2026), against a price of $501.61. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Microsoft Corporation stock overvalued or undervalued in 2026?
As of Sep 17, 2026, MSFT trades below its calculated fair value: price $501.61, fair value $546.83, a gap of about +9% (fairly valued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of MSFT?
No. The price is what the market pays today ($501.61); the fair value is what the company's own numbers justify ($546.83). For Microsoft Corporation the two are $45.22 per share apart. That gap is exactly why we show both numbers side by side.
How much is Microsoft Corporation worth?
The market values Microsoft Corporation at about $3.7T (market capitalisation, as of Sep 17, 2026). Per share that is $501.61; our models calculate a fair value of $546.83 per share.
What do the bullish and bearish scenarios say about MSFT?
Our models span a range for Microsoft Corporation: cautious scenario $316.59, base $546.83, optimistic $791.21 per share (as of Sep 17, 2026, price $501.61). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of MSFT?
Microsoft Corporation trades at a price-to-earnings ratio of 29.9 (as of Sep 17, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $546.83 is built from several models across several years. Other multiples: PEG 1.2, P/B 8.3, P/S 9.0, EV/EBITDA 15.6.
What is the PEG ratio of MSFT?
The PEG ratio of Microsoft Corporation is 1.19 (P/E divided by earnings growth, as of Sep 17, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of Microsoft Corporation (MSFT)?
Balance-sheet figures for Microsoft Corporation (as of Sep 17, 2026): return on equity 34.0%, debt of 0.12 per unit of equity. They feed the Quality Score of 66/100, which measures business quality independently of the share price.
How far is MSFT from its 52-week high?
Microsoft Corporation trades at $501.61, about 9% below its 52-week high of $551.05 and 41% above the low of $355.51 (as of Sep 17, 2026). Distance from the high says nothing about value: that is what the fair value of $546.83 is for.
Which stocks are comparable to Microsoft Corporation?
From the same area (Technology) we also value Oracle Corporation, Palantir Technologies Inc, Palo Alto Networks, Inc, CrowdStrike Holdings, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Microsoft Corporation stock attractive at the current price?
The data as of Sep 17, 2026: price $501.61, calculated fair value $546.83 (+9%), Quality Score 66/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of MSFT calculated?
We run Microsoft Corporation through 26 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $546.83, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 16.1 % above its aggregate fair value. Microsoft Corporation currently trades 9 % below its own fair value, and the market average says nothing about that. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Microsoft Corporation (MSFT)?
The closing price on Sep 21, 2026 was $501.61. Our model-based fair value is $546.83, about +9% upside (fairly valued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Microsoft Corporation right now?
The price sits close to our fair value, market and models broadly agree here, little valuation tension. A fairly wide model range ($316.59 to $791.21) leaves room in how you read the outcome.
Where does the earnings growth of Microsoft Corporation (MSFT) come from?
Earnings per share at Microsoft Corporation grew +20.3 % a year from 2014 to 2025. Broken into its drivers: revenue per share +13.0 %, EBIT margin +5.8 %, tax rate +0.8 %, residual (interest, one-offs) −0.2 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Microsoft Corporation
How large is the market capitalisation of Microsoft Corporation (MSFT)?
The market capitalisation of Microsoft Corporation is $3.7T. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Microsoft Corporation (MSFT)?
The price-to-sales ratio of Microsoft Corporation is 10.8 (P/E × margin). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Microsoft Corporation (MSFT)?
Earnings per share at Microsoft Corporation are $16.79 (price ÷ EPS = P/E 29.9). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Microsoft Corporation (MSFT)?
The dividend yield of Microsoft Corporation is 0.7% (payout 21.2%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Microsoft Corporation (MSFT)?
The net margin of Microsoft Corporation is 36.1% (fiscal year 2025). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Microsoft Corporation (MSFT)?
The return on equity (ROE) of Microsoft Corporation is 34.0% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Microsoft Corporation (MSFT)?
On an EBIT basis the return on assets of Microsoft Corporation is 21.5% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Microsoft Corporation (MSFT)?
The operating margin of Microsoft Corporation is 46.3% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Microsoft Corporation (MSFT)?
Revenue at Microsoft Corporation is growing +18.3% versus a year earlier (3y avg +12.4%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Microsoft Corporation (MSFT)?
Earnings per share at Microsoft Corporation are growing +23.4% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Microsoft Corporation (MSFT) carry?
The net debt of Microsoft Corporation is $30.3B (fiscal year 2025, ≈ 0.4 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Sep 17, 2026