What is MSFT's intrinsic value?

TickerWorth's blended fair value for Microsoft Corporation (MSFT) is $312.59 per share, versus a market price of $529.05 (69% above fair value).

Is MSFT overvalued or undervalued?

On our blended fair value MSFT looks overvalued vs fair value at $529.05. This is an educational estimate, not advice.

What discount rate is used for MSFT?

A WACC of 10.6% and a terminal growth rate of 2.5%.

Is Microsoft stock undervalued?

TickerWorth's fair value for Microsoft Corporation (MSFT) is $312.59 against a market price of $529.05. Our read: 69% above fair value. This is a model estimate, not investment advice.

Microsoft (MSFT) DCF valuation and fair value

Our fair value for Microsoft Corporation (MSFT) is $312.59, built on a 10.6% discount rate (WACC) and 2.5% terminal growth. It blends our discounted-cash-flow model with other valuation lenses. Every assumption is listed on this page with its source.

Microsoft (MSFT) insider trading

The most recent insider filing (SEC Form 4) for Microsoft Corporation (MSFT): Coleman Amy, EVP, Chief Human Resources Off, shares withheld (tax) on 2026-10-15. The latest filings are listed on this page. A disclosure, not a signal to trade.

MSFT · Intrinsic value

Is Microsoft Corporation (MSFT) overvalued or undervalued?

Name: Microsoft Corporation (MSFT) DCF intrinsic value
Creator: TickerWorth

Microsoft Corporation (MSFT) trades at the delayed market price of $529.05 a share. That price already implies revenue growth of more than 25%/yr. TickerWorth's fair value is $312.59 a share (69% above fair value), as of Oct 19, 2026. It is a model estimate, and every input behind it is sourced below.

Model by Miraaj Patel · generated from a hand-researched model · Updated Oct 19, 2026 · How these pages are made

Open full MSFT analysis

Is MSFT overvalued?

Fair value: $312.59
Market price: $529.05
Downside to fair value: 40.9%
Verdict: 69% above fair value

Price as of 19 Oct 2026, 13:15 UTC · Prices are delayed.

Fair value against the delayed market price: 69% above fair value.

Reverse DCF: Today's price implies revenue growth of more than 25%/yr. Above about 25% a year the reverse-DCF stops being informative. It solves for revenue growth alone — holding margins, capital intensity and the forecast horizon fixed — so a price well above our cash-flow model's value has nowhere to go but growth, and the solver returns a rate the model can't reconcile. Read it as "the price implies growth we can't justify", not as a forecast.

What is MSFT's TickerWorth Score?

C49/100

Middle of the pack — real strengths and real weaknesses

Compared with Technology companies in US

Its strongest point: a profitable, high-quality business. Its weakest: trades above our estimate of what it's worth.

Value · 37 of 100
Cheaper than 37% of Technology companies in US
Price vs worth · 17 of 100
Quality · 84 of 100
More profitable than 84% of Technology companies in US
Financial health · 47 of 100
Financially stronger than 47% of Technology companies in US
Growth · 36 of 100
Growing faster than 36% of Technology companies in US
Momentum · 79 of 100
Outperformed 79% of Technology companies in US over the past year

Confidence: Medium confidence · Scored 19 Oct 2026, 13:14 UTC

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Where the numbers come from

Hand-researched model

What the modeller flagged

THE MODEL LANDS FAR BELOW THE PRICE — THE DISCOUNT RATE FIRST, CAPEX SECOND, AND NO SINGLE LEVER CLOSES IT. WACC is 10.61% because the house risk-free is 5.24% and the published beta is 1.108; the same operating forecast is worth $303.83 at an 8.5% WACC and $333.10 at 8.0%; the WACC that reproduces $517.53 is ~6.1%. The operating assumptions are not unusually bearish: FY27 is on guidance, growth fades from 16% to 8%, and margins end at 42.5%. Even zero capex forever only reaches $407.67. What the price requires is a much lower discount rate AND growth that persists well beyond five years — the five-year-then-2.5% structure every model in this tracker uses cannot express that, and for Microsoft that structural limit is a large part of the gap.
YEAR-1 FCF IS ~82% BELOW MICROSOFT'S LAST REPORTED FCF (~$12B modelled vs $66,987M). Fully decomposable and deliberate: Microsoft's FCF excludes finance-lease capex ($24.6B in FY26) and component prepayments ($19.9B), FY27 capex rises ~$55B on guidance, and the 20% tax rate and the flat 17% D&A add-back are applied. On my explicit year-by-year D&A path Year-1 FCF is roughly zero, consistent with the CFO's 'we expect to remain free cash flow positive in FY27' on Microsoft's narrower definition.
TERMINAL VALUE IS ~75% OF ENTERPRISE VALUE (74.5%), right at the line where a DCF becomes mostly a bet on the steady state. Note the flat 'equivalent' capex rate moves value INTO Years 2-5 relative to my true fade path (where FY28-FY30 cash flow is thin and the steady state carries even more weight), so the honest reading is that more than three quarters of this answer rests on steady-state margin, capital intensity and the discount rate. The implied terminal multiple is only ~5.8x EBITDA — very low for Microsoft, and a direct consequence of a 10.6% WACC against 2.5% growth.
OPENAI STAKE CARRIED AT BOOK, AND THAT IS A KNOWN UNDERSTATEMENT. Microsoft said on 2025-10-28 its OpenAI stake was 'valued at approximately $135 billion' (~27% as-converted). The 10-K now says ~25%, and the stake is inside a $12.0B equity-method book total. Marking it at $135B instead of book would add roughly $16/share. Not done: an 11-month-old private-round mark, since diluted, on an illiquid, governance-restricted holding is not a number this site can stand behind — and OpenAI is now competing with Microsoft directly.
THE CAPEX LINE STILL EXCLUDES TWO REAL USES OF CASH. Component prepayments ($19.9B in FY26 'other investing', 'primarily to facilitate the purchase of components') and $329.1B of signed-but-not-commenced leases (FY27-FY33). The first is sized in capex_year1 (~$2.40/share if it recurs once); the second will arrive partly as finance-lease capex (inside the 23.7%) and partly as operating rent (inside the margin path). If both run hotter than assumed, value falls.
COUNTERPARTY CONCENTRATION IN THE BACKLOG. Commercial RPO grew 84% to $678B but only 25% excluding OpenAI. The CFO said nearly 90% of RPO comes from customers outside frontier-model companies, yet the GROWTH is concentrated. A renegotiated or impaired OpenAI commitment hits Azure growth in Years 2-4.
SBC of $12,405M (3.7% of revenue) is expensed inside GAAP operating income; no add-back. Buybacks more than offset it, so the diluted count falls slowly.
ONE-QUARTER GUIDANCE. Microsoft guides only the next quarter in numbers; Year 1's 16% revenue and 46.0% margin rest on Q1 figures plus qualitative full-year language ('double-digit', 'down less than a point'). Q1 FY27 on ~2026-10-28 is the first real test.

MSFT DCF valuation: what the price assumes

At a recent price of $529.05, Microsoft Corporation (MSFT) trades 69% above TickerWorth's blended fair value of $312.59 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices MSFT overvalued vs our estimate of what the business is intrinsically worth. Our fair value sits below the market, an implied -40.9% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.

Read the full reasoning

One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values MSFT at about $220.11 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.

The valuation discounts Microsoft Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 10.6%, with a long-run terminal growth rate of 2.5%. About 75% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.

Running the DCF in reverse — solving for the growth the current price already assumes — MSFT would need sustained revenue growth of more than 25%/yr to justify today's price, against about 12.0% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.

Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, MSFT's modeled DCF value ranges from about $169.85 to $314.70 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.

How to read this page: the DCF fair value is what Microsoft Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of MSFT's intrinsic value. Figures update as new filings and prices come in.

Every input behind MSFT's DCF

Input	Value	Source
Base-year revenueMicrosoft FY2026 Q4 earnings release, 8-K Ex-99.1 (accession 0001193125-26-323632, filed 2026-07-29): Total revenue FY2026 (year to 2026-06-30) $331,839M, +17.8% on FY2025's $281,724M (+16% constant currency); ties to the FY2026 10-K. Quarterly shape: Q1 $77,673M (+18.4%), Q2 $81,273M (+16.7%), Q3 $82,886M (+18.3%), Q4 $90,007M (+17.7%) — no deceleration through the year. Mix matters for everything below: on the restated FY27 basis (8-K 2026-09-02) Azure was $101,938M (31% of revenue, +40%), Microsoft 365 cloud $100,299M, and the whole Agents and Infra segment $268,127M (81%). CONCENTRATION, read off the 10-K related-party note: revenue from commercial arrangements with OpenAI was $24.1B in FY2026 (7.3% of revenue) with $6.0B of receivables outstanding. No later quarter has been filed (Q1 FY2027 reports ~2026-10-28), so the base is the latest data there is.	$331,839,000,000	Microsoft FY2026 Q4 earnings release, 8-K Ex-99.1 (accession 0001193125-26-323632, filed 2026-07-29): Total revenue FY2026 (year to 2026-06-30) $331,839M, +17.8% on FY2025's $281,724M (+16% constant currency); ties to the FY2026 10-K. Quarterly shape: Q1 $77,673M (+18.4%), Q2 $81,273M (+16.7%), Q3 $82,886M (+18.3%), Q4 $90,007M (+17.7%) — no deceleration through the year. Mix matters for everything below: on the restated FY27 basis (8-K 2026-09-02) Azure was $101,938M (31% of revenue, +40%), Microsoft 365 cloud $100,299M, and the whole Agents and Infra segment $268,127M (81%). CONCENTRATION, read off the 10-K related-party note: revenue from commercial arrangements with OpenAI was $24.1B in FY2026 (7.3% of revenue) with $6.0B of receivables outstanding. No later quarter has been filed (Q1 FY2027 reports ~2026-10-28), so the base is the latest data there is.
Base EBIT marginMicrosoft FY2026 Q4 earnings release, 8-K Ex-99.1 (accession 0001193125-26-323632, filed 2026-07-29): GAAP operating income $155,237M / revenue $331,839M = 46.78% (FY2025: $128,528M / $281,724M = 45.62%). Unlike IBM this is a reported line, not a derivation. It EXCLUDES other income of $10,697M, which included $6.5B of net OpenAI gains (mostly the October 2025 recapitalisation dilution gain) and a $3.2B Anthropic gain — excluded deliberately: they are investment marks, and the investments themselves are credited in the net-debt bridge at book value. It INCLUDES finance-lease amortisation ($5,403M) but NOT finance-lease interest ($2,547M, below the line) — consistent with treating finance leases as debt (see market.net_debt). It also absorbs XBOX impairment/severance and Voluntary Retirement Program costs flagged in the release, so it is if anything slightly depressed by one-offs. QUARTERLY CHECK: Q4 FY26 margin was 45.1% ($40,603M / $90,007M), Q1-Q3 48.9%/47.1%/46.3% — the margin is drifting down as AI depreciation arrives, which is exactly what the forecast path assumes continues.	46.8%	Microsoft FY2026 Q4 earnings release, 8-K Ex-99.1 (accession 0001193125-26-323632, filed 2026-07-29): GAAP operating income $155,237M / revenue $331,839M = 46.78% (FY2025: $128,528M / $281,724M = 45.62%). Unlike IBM this is a reported line, not a derivation. It EXCLUDES other income of $10,697M, which included $6.5B of net OpenAI gains (mostly the October 2025 recapitalisation dilution gain) and a $3.2B Anthropic gain — excluded deliberately: they are investment marks, and the investments themselves are credited in the net-debt bridge at book value. It INCLUDES finance-lease amortisation ($5,403M) but NOT finance-lease interest ($2,547M, below the line) — consistent with treating finance leases as debt (see market.net_debt). It also absorbs XBOX impairment/severance and Voluntary Retirement Program costs flagged in the release, so it is if anything slightly depressed by one-offs. QUARTERLY CHECK: Q4 FY26 margin was 45.1% ($40,603M / $90,007M), Q1-Q3 48.9%/47.1%/46.3% — the margin is drifting down as AI depreciation arrives, which is exactly what the forecast path assumes continues.
Forecast revenue growthESTIMATEAssumption — TickerWorth's 5-year explicit forecast	16% → 14% → 12% → 10% → 8%	ESTIMATEAssumption — TickerWorth's 5-year explicit forecast
Risk-free rateUS 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. House input shared by every model refreshed on 2026-10-03.	5.2%	US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. House input shared by every model refreshed on 2026-10-03.
BetaYahoo Finance 5Y-monthly beta via yfinance: Published 5Y-monthly beta 1.108, used AS PUBLISHED — no normalization. I considered pulling it toward 1.0 (Microsoft is one of the largest weights in the index it is regressed against, and its cash flows are among the least cyclical in the tracker) but the five-year window includes the 2022 drawdown and the 2026 AI-capex repricing (stock ranged $349-$554 in 52 weeks), which is genuine risk, so I left it. Sensitivity (engine re-runs): beta 1.0 gives $236.55 (+$16); 0.9 gives $253.95 (+$34). Closing the gap through beta alone would need ~0.18 — i.e. it cannot be done with any defensible beta. The reverse DCF in the explainer shows what beta would close the gap.	1.11	Yahoo Finance 5Y-monthly beta via yfinance: Published 5Y-monthly beta 1.108, used AS PUBLISHED — no normalization. I considered pulling it toward 1.0 (Microsoft is one of the largest weights in the index it is regressed against, and its cash flows are among the least cyclical in the tracker) but the five-year window includes the 2022 drawdown and the 2026 AI-capex repricing (stock ranged $349-$554 in 52 weeks), which is genuine risk, so I left it. Sensitivity (engine re-runs): beta 1.0 gives $236.55 (+$16); 0.9 gives $253.95 (+$34). Closing the gap through beta alone would need ~0.18 — i.e. it cannot be done with any defensible beta. The reverse DCF in the explainer shows what beta would close the gap.
Terminal growthESTIMATEAssumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Arguably LOW for Microsoft — it ends the explicit forecast still growing 8% and owns several franchises with no obvious ceiling — but a perpetuity rate above nominal GDP claims a company eventually becomes the economy. Engine re-runs: 3.0% gives $231.69 (+$12); 3.5% gives $244.90 (+$25). Must stay well below WACC (10.6%).	2.5%	ESTIMATEAssumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Arguably LOW for Microsoft — it ends the explicit forecast still growing 8% and owns several franchises with no obvious ceiling — but a perpetuity rate above nominal GDP claims a company eventually becomes the economy. Engine re-runs: 3.0% gives $231.69 (+$12); 3.5% gives $244.90 (+$25). Must stay well below WACC (10.6%).
Diluted sharesMicrosoft FY2026 Q4 earnings release, 8-K Ex-99.1 (accession 0001193125-26-323632, filed 2026-07-29): Q4 FY2026 weighted-average diluted shares 7,443M (FY2026 7,453M; Q3 7,445M; FY2025 7,465M). Outstanding 7,427M at 2026-06-30. The count is drifting DOWN ~0.3%/yr: buybacks ($22.3B in FY26) more than offset stock-based compensation ($12.4B). Using the diluted figure is how this model carries SBC dilution.	7,443M	Microsoft FY2026 Q4 earnings release, 8-K Ex-99.1 (accession 0001193125-26-323632, filed 2026-07-29): Q4 FY2026 weighted-average diluted shares 7,443M (FY2026 7,453M; Q3 7,445M; FY2025 7,465M). Outstanding 7,427M at 2026-06-30. The count is drifting DOWN ~0.3%/yr: buybacks ($22.3B in FY26) more than offset stock-based compensation ($12.4B). Using the diluted figure is how this model carries SBC dilution.
Market priceDelayed quote · as of 2026-10-19 13:15 UTC	$529.05	Delayed quote · as of 2026-10-19 13:15 UTC

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What does Microsoft Corporation do?

What does it do?

Microsoft develops and sells technology solutions including operating systems, cloud services, software applications, and devices. The company serves individuals and businesses worldwide through products like Windows, Microsoft 365, Azure, LinkedIn, Dynamics 365, and gaming consoles.

How does it make money?

Microsoft generates revenue through licensing and subscription-based software, cloud services, and device sales. In the trailing twelve months, the company reported total revenue of $331.8 billion with a gross margin of 67.9% and net profit margin of 40.3%.

Is it financially healthy?

Microsoft shows strong financial health with an operating margin of 45.1%, a debt-to-equity ratio of 0.29, and a current ratio of 1.23. These metrics indicate the company is profitable, has manageable debt levels, and maintains adequate short-term liquidity.

Who at MSFT filed insider trades?

Recent insider filings for Microsoft Corporation
Date	Insider	Relationship	What happened	Value	Filing
15 Oct 2026	Coleman Amy	EVP, Chief Human Resources Off	Shares withheld (tax)	$17,048.19	Form 4 for Coleman Amy (opens sec.gov in a new tab)
13 Oct 2026	Hood Amy	EVP, Chief Financial Officer	Open-market sale	$1,845,237.94	Form 4 for Hood Amy (opens sec.gov in a new tab)
13 Oct 2026	Hood Amy	EVP, Chief Financial Officer	Open-market sale	$1,597,475.23	Form 4 for Hood Amy (opens sec.gov in a new tab)
13 Oct 2026	Hood Amy	EVP, Chief Financial Officer	Open-market sale	$541,589.82	Form 4 for Hood Amy (opens sec.gov in a new tab)
15 Sept 2026	SMITH BRADFORD L	Vice Chair and President	Grant / award	—	Form 4 for SMITH BRADFORD L (opens sec.gov in a new tab)
15 Sept 2026	Numoto Takeshi	EVP, Chief Marketing Officer	Grant / award	—	Form 4 for Numoto Takeshi (opens sec.gov in a new tab)

A disclosure, not a signal to trade. Source: SEC EDGAR (Form 4). Older filings and the 90-day buying-and-selling read are part of Pro. See plans

Common questions

What is MSFT's intrinsic value?
TickerWorth's blended fair value for Microsoft Corporation (MSFT) is $312.59 per share, versus a market price of $529.05 (69% above fair value).
Is MSFT overvalued or undervalued?
On our blended fair value MSFT looks overvalued vs fair value at $529.05. This is an educational estimate, not advice.
What discount rate is used for MSFT?
A WACC of 10.6% and a terminal growth rate of 2.5%.
Is Microsoft stock undervalued?
TickerWorth's fair value for Microsoft Corporation (MSFT) is $312.59 against a market price of $529.05. Our read: 69% above fair value. This is a model estimate, not investment advice.
Microsoft (MSFT) DCF valuation and fair value
Our fair value for Microsoft Corporation (MSFT) is $312.59, built on a 10.6% discount rate (WACC) and 2.5% terminal growth. It blends our discounted-cash-flow model with other valuation lenses. Every assumption is listed on this page with its source.
What growth is priced into Microsoft stock?
Today's price implies revenue growth of more than 25%/yr. Above about 25% a year the reverse-DCF stops being informative. It solves for revenue growth alone — holding margins, capital intensity and the forecast horizon fixed — so a price well above our cash-flow model's value has nowhere to go but growth, and the solver returns a rate the model can't reconcile. Read it as "the price implies growth we can't justify", not as a forecast. This is a reverse DCF: it holds our cash-flow model's other inputs and solves for the revenue growth that makes the model equal today's price of $529.05. A model estimate, not investment advice.
Microsoft (MSFT) insider trading
The most recent insider filing (SEC Form 4) for Microsoft Corporation (MSFT): Coleman Amy, EVP, Chief Human Resources Off, shares withheld (tax) on 2026-10-15. The latest filings are listed on this page. A disclosure, not a signal to trade.