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MicrosoftXSWX:MSFT +2.04%99 3-Year FCF Growth Rate is 4.10% as of Jun. 2026, which is 69% below its 10-year median of 13.20. GuruFocus rates XSWX:MSFT with a GF Score™ of 99/100 and a GF Value™ of CHF467.96 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 1,861 Software companies, Microsoft ranks worse than 63.25% on this metric.
During the past 12 months, Microsoft's average Free Cash Flow per Share Growth Rate was -6.30% per year.
During the past 3 years, the average Free Cash Flow per Share Growth Rate was 4.10% per year.
During the past 5 years, the average Free Cash Flow per Share Growth Rate was 4.40% per year.
During the past 10 years, the average Free Cash Flow per Share Growth Rate was 12.30% per year.
Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the average Free Cash Flow per Share growth rate.
During the past 13 years, the highest 3-Year average Free Cash Flow per Share Growth Rate of Microsoft was 80.40% per year. The lowest was -5.90% per year. And the median was 13.20% per year.
Microsoft (XSWX:MSFT) 3-Year FCF Growth Rate Explanation
Free Cash Flow per Share is the amount of Free Cash Flow per outstanding share of the company's stock. Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company. It's used in the calculation of Forward Rate of Return (Yacktman) %.
Microsoft 3-Year FCF Growth Rate Related Terms
XSWX:MSFT vs ORCL, PLTR, PANW: 3-Year FCF Growth Rate Comparison
For the Software - Infrastructure subindustry, Microsoft's 3-Year FCF Growth Rate, along with its competitors' market caps and 3-Year FCF Growth Rate data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Microsoft 3-Year FCF Growth Rate vs Software Industry
For the Software industry and Technology sector, Microsoft's 3-Year FCF Growth Rate distribution charts can be found below:
* The bar in red indicates where Microsoft's 3-Year FCF Growth Rate falls into.
This is the 3-year average growth rate of Free Cash Flow per Share. The growth rate is calculated using exponential compounding based on the latest four year annual data.
Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the average Free Cash Flow per Share growth rate.
Microsoft (XSWX:MSFT) has a 3-Year FCF Growth Rate of 4.10% as of Jun. 2026. 3-Year FCF Growth Rate is the 3-year average growth rate of Free Cash Flow per Share. View historical data for Microsoft and its competitors. This is 69% below median its historical median of 13.20. According to the industry distribution chart, Microsoft ranks #1177 out of 1861 companies in the Software industry, placing it in the top 63.2%.
Is Microsoft's 3-Year FCF Growth Rate too high?
Microsoft's current 3-Year FCF Growth Rate of 4.10% is 69% below median its 10-year median of 13.20. The Software industry median 3-Year FCF Growth Rate is 17.00. Microsoft's value of 4.10% is 75.9% below this industry median. Based on the distribution chart, Microsoft ranks #1177 out of 1861 companies in the Software industry, which is below the industry midpoint. Overall, Microsoft has a GF Score™ of 99/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Microsoft's 3-Year FCF Growth Rate compare to ORCL and PLTR?
According to the Software industry distribution chart, Microsoft ranks #1177 out of 1861 companies for 3-Year FCF Growth Rate. This places Microsoft in the lower half of its industry. The industry median 3-Year FCF Growth Rate is 17.00. Microsoft's value of 4.10% is 75.9% below this benchmark. While the company's 10-year median is 13.20 vs. the industry median of 17.00, Microsoft has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year FCF Growth Rate for a Software company?
The median 3-Year FCF Growth Rate among Software companies is 17.00, based on 1,861 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year FCF Growth Rate significantly above this median, while those in the bottom quartile fall well below. However, 3-Year FCF Growth Rate should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microsoft's current 3-Year FCF Growth Rate of 4.10% is 75.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high 3-Year FCF Growth Rate mean?
A high 3-Year FCF Growth Rate can signal that a stock is expensive relative to its fundamentals. 3-Year FCF Growth Rate is the 3-year average growth rate of Free Cash Flow per Share. View historical data for Microsoft and its competitors. For the Software industry, the median 3-Year FCF Growth Rate is 17.00 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microsoft's current 3-Year FCF Growth Rate is 4.10%, which is 69% below median its own 10-year median of 13.20. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Microsoft stock overvalued right now?
Based on GuruFocus' analysis, Microsoft (XSWX:MSFT) is currently considered Modestly Undervalued. The stock's GF Value™ is CHF467.96, compared to a current price of CHF415.05 — trading 11.3% below its estimated fair value. The current 3-Year FCF Growth Rate is 4.10%, which is 69% below median its 10-year median of 13.20 and 75.9% below the Software industry median of 17.00. Microsoft's overall GF Score™ is 99/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year FCF Growth Rate calculated?
3-Year FCF Growth Rate is calculated from a company's financial statements. For Microsoft (XSWX:MSFT), the current 3-Year FCF Growth Rate is 4.10% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Microsoft (XSWX:MSFT) Overvalued in 2026?
Based on GuruFocus' analysis, Microsoft stock appears to be undervalued.
The current stock price of CHF415.05 is trading 11.3% below its estimated GF Value™ of CHF467.96.
GuruFocus considers Microsoft to be Modestly Undervalued.
Key valuation signals for XSWX:MSFT:
3-Year FCF Growth Rate: 4.10% (69% below median its 10-year median of 13.20)
GF Value™: CHF467.96 vs. price of CHF415.05 (11.3% below fair value)
Industry Position: 75.9% below the Software median (#1177 of 1861)
No single metric tells the full story. See the XSWX:MSFT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
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).
99GF Score
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