Microsoft Corp (MSFT, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $428.98 and a daily gain of 2.44%, despite a slight three-month decline of -3.3%, Microsoft Corp stands out in the market. A detailed analysis using the GF Score indicates that Microsoft Corp is poised for significant growth, backed by solid financial metrics and strategic market positioning.
What Is the GF Score?
The GF Score is a proprietary ranking system from GuruFocus, designed to predict stock performance by evaluating five key aspects of a company's financials. This system, which has been rigorously backtested from 2006 to 2021, suggests that stocks with higher GF Scores typically yield better returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. For Microsoft Corp, the GF Score is an impressive 98 out of 100, reflecting its strong potential for market leadership.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 7/10
- Momentum rank: 8/10
Understanding Microsoft Corp's Business
Microsoft Corp, with a market cap of $3.19 trillion and annual sales of $245.12 billion, is a global leader in software development and licensing. Known for its Windows operating systems and Office productivity suite, the company operates across three major segments: productivity and business processes, intelligent cloud, and more personal computing. These segments encompass a range of products and services including Microsoft Office, Office 365, Azure, LinkedIn, and Xbox, among others. Microsoft's operating margin stands at a robust 44.64%, highlighting its efficiency and profitability.
Financial Strength Breakdown
Microsoft Corp's financial resilience is evident through its Financial Strength rating. An impressive Interest Coverage ratio of 37.29 and an Altman Z-Score of 9.41 underscore its ability to manage financial obligations and stave off distress. The strategic management of its debt, with a Debt-to-Revenue ratio of 0.27, further solidifies Microsoft's financial health.
Profitability and Growth Metrics
Microsoft Corp's Profitability Rank is exemplary, supported by a consistent increase in Operating Margin over the past five years, reaching 44.64% in 2024. The company's Gross Margin has also improved, indicating enhanced efficiency in revenue conversion to profit. Growth is equally strong, with a 3-Year Revenue Growth Rate of 14.1%, outperforming a significant portion of the software industry.
Conclusion
Considering Microsoft Corp's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
