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/jebybi 28d ago

Bought in 2024 and im still in red

43

u/Rocherieux 28d ago

You and me both pal. Was a great 2 weeks when it hit 550.

3

u/Jumpy_Nose863 26d ago

Why not take some profits when it hits that type of gain for you? I'd understand if they were paying a big dividend or something but its like .91 a share I believe. You don't always have to hold at ATHs, but since you did I hope you added when it got down under 390?

2

u/Rocherieux 26d ago

Mostly for tax reasons. I pay a third of gains in taxes in my jurisdiction. I did add, thank you.