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Microsoft Corporation
Rule-based classification of fundamentals against the sector. Not a price forecast and not investment advice.
Signals align: quality at a discount to the sector
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4 of 5 met · composite in line with peers
Business quality, valuation against the sector, and position in the 52-week range — whether they line up or not.
Stable quality
Profitability
4/4
Debt & liquidity
2/3
Efficiency
0/2
Operating margin of 46.8% — +60% above the sector median — sits alongside a Debt/EBITDA of 0.2×, which runs -82% below the sector median 0.9×: a balance sheet that carries little strain relative to peers. EV/EBITDA of 19.3× is -40% below the sector median 32.1×, so the market is pricing this level of profitability at a discount to the sector — an unusual combination. The F-Score of 6/9 reflects full marks on profitability but a zero on efficiency, meaning asset turnover and margin expansion signals are absent. FCF growth year over year of -4.6% lags the sector median 28.2% by -116%, the one clear soft spot. Consensus has been well-anchored: the beat rate is strong and the realized three-year EPS CAGR per SEC filings aligns with what analysts model, a less common outcome given the documented optimism bias in forward estimates.
| Ticker | Name | F-Score | ROE | Revenue YoY | Op. margin |
|---|---|---|---|---|---|
| AAPL | Apple | 8/9 | 171% | +6% |
Quarter-by-quarter classification · a retrospective read by the current logic · not a price forecast
Rule-based classification of fundamentals against the sector. Not a price forecast and not investment advice. The method did not see these quarters in real time; this is the current logic applied to past reports.
Priced close to current earnings; analyst sentiment is steady; has mostly beaten consensus.
Price against next year's expected earnings. The forward P/E already carries analyst optimism — read it alongside the “Versus consensus” line.
A forward P/E below the current one means the market expects earnings to grow; above it, to fall. The historical growth is realized figures from SEC filings, not a forecast.
The three-month change in the share of positive analyst ratings. This is sentiment, not an earnings-estimate revision, and not a call to act.
When Microsoft reports on 2026-10-27, track free cash flow growth year over year against the current -28.2% figure. The F-Score efficiency block scores 0/2, so any improvement in asset turnover or capital deployment will be the clearest signal of operational momentum relative to the sector.
On SEC EDGAR, open Microsoft's most recent 10-K and focus on management's discussion of capital expenditure commitments — the context behind a Debt/EBITDA of 0.92× and an operating margin of 29.2% sits in those disclosures. Pay particular attention to cloud infrastructure spending plans, which directly affect free cash flow conversion.
Pick two or three companies from the same-sector table in section 06 and line up their EV/EBITDA ratios against Microsoft's 32.1×, which already sits 40% below the sector median. The table is alphabetical with no ranking, so the selection and the comparison are yours to make.
Steps you can check yourself, based on the figures in this brief.
Piotroski F-Score: nine binary tests of financial strength from the annual report. A ✓ marks a test passed, a dot (·) a test failed.
Over 4 years: -9%+25%-3%-6%
Over 4 years: 0.420.340.270.16
Over 4 years: +7%+16%+15%+18%
The context on the right shows how each figure compares with the sector median. The trend below tracks the change over recent fiscal years.
Beat consensus in 8 of 8 recent quarters — the company clears estimates regularly (consensus is often set conservatively).
Last quarter's EPS against consensus, plus the estimated date of the next report.
| 32% |
| ACN | Accenture | 4/9 | 26% | +7% | 15% |
| ADBE | Adobe | 7/9 | 55% | +11% | 37% |
| AMAT | Applied Materials | 6/9 | 36% | +4% | 29% |
| AMD | Advanced Micro Devices | 7/9 | 7% | +34% | 11% |
| AVGO | Broadcom | 7/9 | 43% | +24% | 40% |
| CRM | Salesforce | 7/9 | 12% | +10% | 20% |
| CSCO | Cisco | 8/9 | 22% | +5% | 21% |
| IBM | IBM | 6/9 | 35% | +8% | — |
| INTC | Intel | 6/9 | -0% | -0% | -4% |
| INTU | Intuit | 8/9 | 20% | +16% | 26% |
| MSFT | Microsoft Corporation | 6/9 | 34% | +18% | 47% |
| NOW | ServiceNow | 4/9 | 15% | +21% | 14% |
| NVDA | NVIDIA | 3/9 | 101% | +65% | 60% |
| ORCL | Oracle | 5/9 | 54% | +17% | 31% |
| TXN | Texas Instruments | 7/9 | 30% | +13% | 34% |
A sample of 16 companies in the sector including the target, alphabetical, unranked. Data from the latest SEC annual reports.
Rule-based classification of fundamentals against the sector. Not a price forecast and not investment advice.
A simplified retrospective read: no analyst forecast (not available historically); the source is the annual report as of the date, so neighbouring quarters can rest on the same data. Quarters with the same classification in a row are merged into one row — each row is one change in the read, not a separate quarter. One ticker is an illustration of the classification logic, not statistics. How we calculate →
The last few quarters are recent context, not a fixed rate. Consensus for near quarters is set low, so companies clear it routinely; over long horizons the forecasts run the other way, too high.
A description of what the market and analysts expect. Not a price forecast and not investment advice. Analyst forecasts run systematically optimistic over long horizons — read them with that discount.