Microsoft Corporation
NASDAQ: MSFT · TECHNOLOGY · SOFTWARE - INFRASTRUCTURE
Updated 2026-04-29
Microsoft Corporation (MSFT) Stock Valuation Analysis
Fair value estimate, historical valuation range, and quality signals for MSFT.
Valued
Valuation reasonably reflects current fundamentals. Limited margin of safety at these levels.
MSFT historical valuation range
Where current P/E sits in MSFT's own 5Y range.
MSFT intrinsic value (DCF)
DCF-based fair value estimate vs current market price.
Intrinsic value calculated using discounted cash flow (DCF) model based on projected free cash flows, discount rate, and terminal growth assumptions. A positive margin of safety indicates the current price is below estimated fair value, providing a cushion against estimation error.
MSFT valuation signals
Quick-read green flags, caution flags, and risks based on current metrics.
P/E Ratio — History
Current: 26.59x
P/S Ratio — History
Current: 10.33x
Is MSFT overvalued in 2026?
Microsoft Corporation (MSFT) currently trades at $407.78 per share with a market capitalization of $3,155,787,776,000.00. Based on our multi-factor framework, the stock trades at a fair valuation with a Smart Value Score of 74/100. This score blends growth quality, financial health, and price attractiveness into a single institutional-grade read.
The stock trades at a P/E ratio of 26.6x, below its 5-year median of 29.0x. The PEG ratio of 1.34 points to a price that reasonably reflects expected earnings growth.
Looking at its own history, MSFT is currently trading cheaper than 85% of the last 5Y on P/E. This places it in the 15th percentile of its historical range, a level that has historically coincided with attractive entry points.
Our discounted cash flow model estimates MSFT's intrinsic value at $229.04 per share, against the current market price of $407.78. This implies a premium to fair value of -85.32%. The current price sits well above what projected cash flows justify, implying investors are paying for growth that has not yet materialized.
The Piotroski F-Score of 4/9 puts financial quality in a middling range, neither a standout strength nor an obvious red flag.
Bottom line: MSFT trades at a fair valuation on our framework, with a Smart Value Score of 74/100. The valuation is defensible but offers no obvious bargain. Patience or a better entry price may reward disciplined buyers.
Frequently asked questions
Is MSFT overvalued in 2026?
Based on a Smart Value Score of 74/100, MSFT is fairly valued. Price reasonably reflects current fundamentals with limited cushion in either direction.
What is MSFT's fair value?
Our DCF model estimates MSFT's intrinsic value at $229.04 per share, versus the current price of $407.78. This produces a margin of safety of -85.32%.
What P/E ratio does MSFT trade at?
MSFT trades at a P/E of 26.6x on trailing twelve-month earnings, compared to its 5-year median of 29.0x.
Is MSFT a buy based on valuation?
WallStSmart does not issue buy or sell recommendations. Our Smart Value Score of 74/100 reflects the combined read on growth, quality, and price. The profile is balanced. Best suited for investors with an existing thesis.
How does MSFT's valuation compare to its history?
On P/E, MSFT currently sits in the 15th percentile of its own 5Y range. That is historically cheap relative to where it has traded over the period.
What is MSFT's Smart Value Score?
MSFT's Smart Value Score is 74/100. The Smart Value Score is a proprietary WallStSmart metric blending growth quality, financial health, and valuation attractiveness into a single 0-100 read. Scores above 75 are rare and indicate strong multi-factor alignment.