MSFT · Nasdaq · Services-Prepackaged Software
$530.81 · $4.0T market value · fiscal year to 30 Jun 2026
Live from the latest filings
6 of 10
Buffett tests pass
Margin of safety -97%
Bear
$155.76
Base
$269.05
Bull
$428.39
Price $530.81
The price is above even the bull case.
6 pass · 2 mixed · 2 fail · 0 can't tell
At $530.81, the price is above the base-case value of $269.05 (the bear case is $155.76), so there is no margin of safety (-97%). The standard lens asks for 25%.
Why this testThe owner-earnings yield is 1.8% against a 10-year Treasury yield of 5.2%.
Why this testNo loss years across 15 years of filings, with operating margin varying by 5.9% around its average.
Why this testCapital spending has averaged 2.2× depreciation; estimated maintenance capex was $98.4B last year.
Why this testReturn on equity averaged 37%, reaching 15% in 10 of the years measured; the weakest year was 19%.
Why this testAfter-tax return on invested capital averaged 60% over 10 years and was 31% in the latest year.
Why this testTotal debt of $40.3B would take 0.6 yrs of normalised owner earnings to repay; operating income covers interest 51×. Both tests pass: payback within 4 years and interest cover of 8x or more.
Why this testNormalised owner earnings are $70.6B, and free cash flow has averaged 99% of reported profit.
Why this testEach dollar retained over the period has been matched by 7.4× of market value created ($461.8B retained in total).
Why this testThe diluted share count has changed by -0.5% a year. Shrinking means buybacks are returning value; growing means owners are being diluted.
Why this testDiscounted owner earnings
Bear
$155.76
Base
$269.05
Bull
$428.39
Price $530.81
The price is above even the bull case.
| Scenario | Starting owner earnings | Growth (yrs 1–5) | Terminal | Discount | Value / share |
|---|---|---|---|---|---|
| bear | $70.6B | 6.0% | 1.5% | 9.7% | $155.76 |
| base | $70.6B | 10.0% | 2.5% | 8.2% | $269.05 |
| bull | $70.6B | 13.0% | 3.0% | 7.2% | $428.39 |
How sensitive is that?
| Discount ↓ / Growth → | 6.0% | 8.0% | 10.0% | 12.0% | 14.0% |
|---|---|---|---|---|---|
| 6.2% | $334 | $376 | $423 | $475 |
Fiscal year to 30 Jun 2026
Replicly is a research and education tool. It is not financial advice and does not recommend that you buy or sell any investment. Analyses apply Buffett-inspired principles to public data and can be wrong. Warren Buffett and Berkshire Hathaway are not affiliated with and do not endorse Replicly. Capital is at risk.
| $533 |
| 7.1% | $262 | $294 | $329 | $369 | $413 |
|---|
| 8.2% | $215 | $241 | $269 | $301 | $335 |
|---|
| 9.2% | $183 | $204 | $227 | $253 | $282 |
|---|
| 10.2% | $159 | $176 | $196 | $218 | $242 |
|---|
Green: at least 25% above the price. Amber: above it. Red: below it. n/a means the discount rate is at or below growth, where the model has no finite answer. The corners combine the most extreme assumptions, so treat them as bounds.
Discount rate: 10-year Treasury (5.2%) plus a 3% equity hurdle. Price $530.81 on 20 Oct 2026. End-of-day prices from free public sources, may be delayed or missing.
Revenue
$331.8B
Revenue growth (CAGR)
15%
Operating margin (avg)
40%
Return on equity (avg)
37%
ROIC (avg)
60%
Normalised owner earnings
$70.6B
Cash conversion
99%
Net cash
$36.5B
Debt payback
0.6 yrs
Share count change (CAGR)
-0.5%
Price / earnings
30×
Owner earnings yield
1.8%