MODEL VERDICT
Microsoft Corporation (MSFT)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.40 | $414.44 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.32 | $424.60 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.31 | $422.61 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.33 | $411.22 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.25 | $370.87 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 12 analyst estimates | $383.87 | -7.4% | 20% | A- | Analyst Est. |
| EV/EBITDA 11 industry peers | $608.98 | +46.9% | 20% | A- | Peer Data |
| Industry Median P/E 11 industry peers | $510.33 | +23.1% | 15% | A | Peer Data |
| Price / Free Cash Flow 10 industry peers | $235.24 | -43.2% | 15% | B+ | Peer Data |
| EV/EBIT 11 industry peers | $533.95 | +28.8% | 8% | B+ | Peer Data |
| EV/FCF 10 industry peers | $261.21 | -37.0% | 7% | B | Model Driven |
| Peg Ratio 10 industry peers | $460.13 | +11.0% | 5% | B | Data |
| EV To Revenue 12 industry peers | $309.90 | -25.2% | 4% | B | Data |
| Price / Sales 12 industry peers | $316.66 | -23.6% | 3% | B | Model Driven |
| Earnings Yield 11 industry peers | $510.33 | +23.1% | 2% | B | Data |
| FCF Yield 11 industry peers | $265.46 | -35.9% | 1% | B | Data |
| Weighted Output Blended model output | $449.73 | +8.5% | 100% | 91 | SLIGHTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 26× | 28× | 30× (Current) | 32× | 34× |
|---|---|---|---|---|---|
| Bear Case (8%) | $381 | $411 | $440 | $469 | $499 |
| Conservative (12%) | $398 | $429 | $459 | $490 | $520 |
| Base Case (18.8%) | $421 | $454 | $486 | $519 | $551 |
| Bull Case (25%) | $445 | $479 | $513 | $547 | $582 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 35.20 | 35.72 | 24.85 | 41.78 | 5.66 |
| EV/EBIT | 29.61 | 29.30 | 21.83 | 35.76 | 4.27 |
| EV/EBITDA | 25.31 | 24.50 | 19.14 | 32.19 | 4.18 |
| P/FCF | 40.46 | 42.50 | 27.76 | 50.41 | 8.33 |
| P/FFO | 28.20 | 28.51 | 20.74 | 35.07 | 4.93 |
| P/TBV | 23.56 | 23.26 | 17.93 | 30.29 | 4.02 |
| P/AFFO | 42.60 | 47.74 | 28.56 | 50.54 | 8.69 |
| P/B Ratio | 13.02 | 11.95 | 10.51 | 18.02 | 2.62 |
| Div Yield | 0.01 | 0.01 | 0.01 | 0.01 | 0.00 |
| P/S Ratio | 12.13 | 12.81 | 9.12 | 15.22 | 2.11 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates MSFT's fair value at $449.73 vs the current price of $414.44, implying +8.5% upside potential. Model verdict: Slightly Undervalued. Confidence: 91/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $449.73 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $407.14 (P10) to $477.94 (P90), with a median of $442.15.
MSFT's current P/E of 30.4x compares to the industry median of 37.4x (11 peers in the group). This represents a -18.8% discount to the industry. The historical average P/E is 35.2x over 7 years. Signal: Discount.
81 analysts cover MSFT with a consensus rating of Buy. The consensus price target is $551.75 (range: $415.00 — $675.00), implying +33.1% upside from the current price. Grade breakdown: Strong Buy (0), Buy (65), Hold (16), Sell (0), Strong Sell (0).
The model confidence score is 91/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (12), and model agreement (4). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Margin reversion: Current net margin of 39.3% is 4.8 percentage points above the 7-year average (34.5%), with a Z-score of +1.9σ. If margins normalize, fair value could drop to ~$421. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that MSFT's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +1.9σ, meaning margins are 1.9 standard deviations above their historical average. If margins revert to the 7-year mean (34.5%), the model estimates fair value drops by 160.0% to approximately $421. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.