What is Microsoft Corporation (MSFT) DCF Fair Value and Intrinsic Value in 2026?

Microsoft Corporation (MSFT) intrinsic value is calculated using conservative multi-stage Discounted Cash Flow (DCF) models, 5-year free cash flow trajectories, Graham Numbers, and owner earnings multiples. LocalAlpha tracks real-time margin of safety against live market prices.

What is Microsoft Corporation's historical Return on Invested Capital (ROIC) and Moat Rating?

Microsoft Corporation operates in the Technology sector (Software - Infrastructure) with an economic moat rating of WIDE. LocalAlpha tracks 5-year audited quarterly ROIC, operating margin stability, and balance sheet solvency ratios.

What is Microsoft Corporation's financial health rating and Piotroski F-Score?

Microsoft Corporation's balance sheet quality is evaluated using the 9-point Piotroski F-Score, Altman Z-Score solvency model, debt-to-equity ratio, and quick/current liquidity coverage to guard against financial distress.

How does LocalAlpha monitor Microsoft Corporation (MSFT) for quarterly SEC filing thesis breaks?

LocalAlpha audits Microsoft Corporation's 10-K, 10-Q, and 8-K regulatory filings on SEC EDGAR within 15 minutes of release. If reported metrics breach an investor's custom ROIC floor, operating margin boundary, or qualitative risk criteria, an autonomous breach audit is dispatched immediately.

StocksMSFT

MSFT

Microsoft CorporationTechnology / Software - InfrastructureINTACT

Microsoft Corporation, a technology company, develops and supports a portfolio of technology solutions for individuals and businesses worldwide. Its products include operating systems, server applications, business solution applications, software development tools, desktop and server management tools, and video games; and devices, such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. The company's Productivity and Business Processes segment offers Microsoft 365 Commercial, Enterprise Mobility + Security, Power BI, Exchange, SharePoint, Microsoft Teams, Microsoft 365 Security and Compliance, Microsoft 365 Copilot, and Windows Commercial on-premises and Office licensed on-premises. This segment also provides Microsoft 365 Consumer products and cloud services; LinkedIn, including talent solutions, marketing solutions, subscriptions, and sales solutions; Dynamics 365, a set of cloud-based applications; and on-premises ERP and CRM applications. Its Intelligent Cloud segment offers server products and cloud services; cloud and AI consumption-based services, GitHub cloud services, health and life sciences cloud services, as well as virtual desktop offerings, and other cloud services; SQL Server, Windows Server, Visual Studio, System Center, and related client access licenses; and enterprise support services, industry solutions, Microsoft partner network, and learning experience. The company's More Personal Computing segment provides Windows OEM licensing and devices comprising Surface and PC accessories; XBOX hardware, and XBOX first- and third-party content and services; XBOX Game Pass and other subscriptions; XBOX Cloud Gaming, advertising, and other cloud services; and search advertising consisting of Bing, Copilot, Microsoft News, Microsoft Edge, and third-party affiliates. It sells its products through partners and retail networks. The company was founded in 1975 and is headquartered in Redmond, Washington.

Share Price

$536.29

52W: $349.2 - $559.15

DCF Fair Value

$3.53

-15092.4% Premium

Thesis Hub

P/E (TTM)

28x

ROIC

37.3%

Operating Margin

49.8%

FCF Yield

0.1%

Debt / Equity

0.28x

Piotroski Score

7/9

Altman Z-Score

3.03

Market Cap

$3982.6B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($3.53)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)

—()

Period Range

$— - $—

DCF Fair Value

$3.53

MOS Buy Target (-25%)

$2.65

Valuation Overlays: DCF Fair Value ($3.53) 25% MOS Buy Target ($2.65) Revised Graham ($676.19) Graham Number ($165.26)

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price

$536.29

DCF Fair Value

$3.53

-15089.2% Premium

Starting Free Cash Flow ($M)$2,994M

$100M$2,994M (Reported)$50,000M

Stage 1 Growth (Years 1-5)18.0%

-5%10% (Target)35%

Stage 2 Growth (Years 6-10)4.5%

0%5%20%

Discount Rate (WACC / Hurdle)9.0%

6%9% (Standard)15% (High Risk)

Terminal Perpetual Growth2.5%

1% (GDP Floor)2.5% (Inflation)4.0%

Net Debt ($M)$69,400M

-$100B CashBalance Sheet+$150B Debt

10-Yr PV of Cash Flows

$38.8B

PV of Terminal Value

$56.9B

Implied Enterprise Value

$95.6B

Implied Equity Value

$26.2B

Year	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr 8	Yr 9	Yr 10
Projected FCF ($M)	$3,533	$4,169	$4,919	$5,805	$6,850	$7,158	$7,480	$7,816	$8,168	$8,536
Present Value (PV)	$3,241	$3,509	$3,799	$4,112	$4,452	$4,268	$4,092	$3,923	$3,761	$3,606

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-224.5% Premium

$165.26

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $19.16BVPS: $63.35

Revised Graham Formula+20.7% MoS

$676.19

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Growth Rate (g%)

Bond Yield (Y%)

Buffett Owner Earnings0.1% Yield

$0.38 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $2.8BYield: 0.1%

Reverse DCF: Market Growth Expectation

SPECULATIVE BARRIER

67.1% CAGR (Next 10 Yrs)

At the current price of $536.29, the market is assuming the business will compound Free Cash Flow at 67.1% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict

⚠ High expectations: Leaves minimal margin of safety for operational hiccups.

Autonomous Thesis Underwriting

Surveil MSFT with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Microsoft Corporation. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 49.8% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

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Frequently Asked Questions: Microsoft Corporation (MSFT) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Microsoft Corporation.

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Microsoft Corporation has an estimated DCF intrinsic fair value of $3.53 per share compared to its current market price of $536.29. This represents an estimated 15092.4% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $165.26.