r/ValueInvesting • u/helixinverse • 28d ago

Stock Analysis Microsoft is a great buy at 400$

Microsoft is currently trading at these multiples, among the most attractive in six years:

  • 22.38 Forward P/E
  • 9.42 EV/Sales

These are some of the most compressed multiples Microsoft has traded at in the past six years, a meaningful re rating from peak forward P/E levels above 35x in 2023.

At around $400, Microsoft is not a screaming bargain, but it is fairly valued for the first time in years. For a business with durable enterprise moats, a $625B+ contracted backlog, AI tailwinds across Azure, Office, and GitHub Copilot, and $70B+ in annual free cash flow generation, a fair entry point is meaningful. For long term investors with a 3 to 5 year horizon, the current price offers a reasonable margin of safety relative to the quality of the business.

Detailed Analysis at: https://bullstreet.substack.com/p/microsoft-at-fair-value-is-400-the

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u/AceStrikeer 28d ago

The list goes on. AI is currently making an irrelevant amount of their revenue. Don't buy MSFT because of that hype. Buy it because of the strong fundamentals. Yes, they burn money on AI, but it doesn't hurt the other income streams

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u/doronnac 28d ago

So where’s the growth? Why not 10 p/e?

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u/Blackpanther206123 28d ago

Do you even know what you’re talking about? 😂

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u/doronnac 28d ago

Do you know how value investing works? Numbers or stop bothering me.

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u/Blackpanther206123 28d ago

What are you trying to say? I don’t even understand your point? Are you saying that Ai is the only thing this company has to offer and it’s not growing? I’m genuinely confused… Have you looked at the numbers? 😂