MSFT
Microsoft
Recurring SaaS
★ Quality 79/100Price today
$392.08
what the market pays
Worth
$378.00
calculated cycle value
Price is 4% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
Azure · Office · Teams · LinkedIn
$369.80
per share
How it's calculated
Azure monopoly + Copilot monetization. FCF $66.7B (+17%). AI capex $62.7B — C11 transitory. IV $378. Price $374 down -23% YTD (high $555). BARGAIN <$302, ATTRACTIVE <$359.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 26 peers
You pay 40x times this business's cash flow; its sector median is 20.3x.
3% above what Charlie thinks it's worth (38.6x) — you're overpaying, sector or no sector.
Why Fair price?
Its free cash flow is $9.59/share × 31.0x multiplier plus $8.20 in net cash = $378.00 in intrinsic value. Today's price of $392.08 is just 4% off that value — not cheap, not expensive, that's a fair price.
This is a quality business. The price reflects that quality.
There's no extra safety margin. Not the best time to buy new.
To enter with a margin, the price should drop to $302.40–$359.10.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$302.40
-20% off Value
🟡 Discounted
≤$359.10
-5% off Value
⚪ Today
$392.08
-4% Valor
Fair price
Good business at a fair price. If you already own it, holding makes sense. For a new position, wait for a better price.
“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
— Warren Buffett
Model updated · July 2026
The business
Collects a toll every time the world turns on a computer.
Microsoft sells software by subscription: Office 365, Windows, and its Azure cloud, where companies rent computing capacity instead of buying servers. Charges monthly or yearly, contracts that renew themselves. Net Income of $101.8B on $281.7B in sales: a cash-printing machine.
The switching cost is brutal: an entire company runs on Windows, Excel, and Azure all tangled together. Migrating is like moving countries with your whole family. Azure is one of three players controlling the global cloud, and Copilot already charges extra on an installed base of hundreds of millions.
Revenue history
From $168.1B to $281.7B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $281.7B · FY2025
Of every $100 in sales, $64 goes to costs and operations; $36 is left as net profit (36% margin).
Catalysts and risks
Copilot monetization on the Office installed base, already billing.
Azure growing double digits and winning AI contracts.
AI capex of $62.7B normalizing and freeing up FCF.
AI capital spending surging: $62.7B this year compresses free flow.
Regulators in the U.S. and Europe watch every acquisition and every bundle.
Amazon and Google won't give away the cloud market; the price war is real.
Charlie's note
“Paying 31x for a business compounding at 14% with 70% gross margin is neither a steal nor a giveaway: it's fair for that kind of quality. This year's drop brings you closer to the price where a business like this stops being expensive.”
Analysis · June 2026
So when would be a good price for Microsoft?
By our calculation, not yet. We will email you the day it drops to $359.10 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.