Intrinsic Value (DCF)
Current$392.74
→
Intrinsic$374.89
-5%
$232.92$374.89$717.88
Market implies 20% growth for 5 years
MSFT appears fairly valued — current price aligns with our DCF estimate.
At $393, the market prices in continued high-teens cash flow growth (20%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $233 → Bull $718. Current price implies expectations near the base case.
| Discount ↓Growth → | 15% | 17% | 19% | 21% |
|---|---|---|---|---|
| 6% | $539 | $586 | $636 | $690 |
| 8% | $319 | $346 | $375 | $406 |
| 10% | $224 | $242 | $262 | $283 |
| 12% | $171 | $185 | $200 | $216 |
Bull Case
- Bull case ($718) offers 83% upside at 23% growth, 7% discount
Bear Case
- Bear case ($233) implies 41% downside at 15% growth, 10% discount
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5-Year Free Cash Flow Projection
Year 1$85.09B
Year 2$101.10B
Year 3$120.12B
Year 4$142.72B
Year 5$169.58B
Terminal$3.46T
📐 Model Inputs
Growth Rate18.8%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate8.1%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$71.61BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.