Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Microsoft (NASDAQ:MSFT) in relation to its major competitors in the Software industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
Microsoft Background Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server), and more personal computing (Windows Client, Xbox, Bing search, display advertising, and Surface laptops, tablets, and desktops).
| Microsoft Corp | 37.65 | 12.99 | 13.66 | 9.53% | $33.39 | $42.4 | 17.58% |
| Oracle Corp | 33.12 | 61.36 | 6.73 | 50.61% | $5.3 | $9.41 | 7.11% |
| ServiceNow Inc | 88.35 | 19.99 | 17.05 | 3.98% | $0.51 | $1.92 | 25.62% |
| Palo Alto Networks Inc | 43.70 | 20.93 | 13.19 | 53.52% | $0.21 | $1.48 | 19.33% |
| CrowdStrike Holdings Inc | 853.11 | 33.14 | 25.17 | 2.48% | $0.12 | $0.64 | 32.63% |
| Gen Digital Inc | 9.61 | 5.59 | 3.61 | 5.96% | $0.47 | $0.77 | 1.6% |
| Dolby Laboratories Inc | 43.66 | 3.42 | 6.40 | 2.85% | $0.09 | $0.28 | -5.78% |
| Qualys Inc | 41.28 | 16.71 | 11.28 | 11.75% | $0.05 | $0.12 | 10.49% |
| Teradata Corp | 62.20 | 27.37 | 2.12 | -5.45% | $0.06 | $0.28 | 1.11% |
| N-able Inc | 101.54 | 3.43 | 5.82 | 1.35% | $0.03 | $0.09 | 13.22% |
| Progress Software Corp | 33.48 | 5.02 | 3.38 | 3.39% | $0.05 | $0.14 | 12.63% |
| Average | 131.0 | 19.7 | 9.47 | 13.04% | $0.69 | $1.51 | 11.8% |
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.dividend-frequency { font-size: 12px; color: #6c757d; } By conducting a comprehensive analysis of Microsoft, the following trends become evident:
- The stock's Price to Earnings ratio of 37.65 is lower than the industry average by 0.29x, suggesting potential value in the eyes of market participants.
- Considering a Price to Book ratio of 12.99, which is well below the industry average by 0.66x, the stock may be undervalued based on its book value compared to its peers.
- With a relatively high Price to Sales ratio of 13.66, which is 1.44x the industry average, the stock might be considered overvalued based on sales performance.
- With a Return on Equity (ROE) of 9.53% that is 3.51% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
- The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $33.39 Billion, which is 48.39x above the industry average, indicating stronger profitability and robust cash flow generation.
- With higher gross profit of $42.4 Billion, which indicates 28.08x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 17.58%, outperforming the industry average of 11.8%.
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing Microsoft against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
- Microsoft has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.37.
- This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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