MicrosoftLIM:MSFT +1.21%98 Cyclically Adjusted PB Ratio is 14.91 as of Jul. 12, 2026, which is 16% below its 10-year median of 17.82. GuruFocus rates LIM:MSFT with a GF Score™ of 98/100 and a GF Value™ of $562.96 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 1,598 Software companies, Microsoft ranks worse than 94.68% on this metric.
The historical rank and industry rank for Microsoft's Cyclically Adjusted PB Ratio or its related term are showing as below:
LIM:MSFT'
s Cyclically Adjusted PB Ratio Range Over the Past 10 Years
Min: 7.27 Med: 17.82 Max: 26.78
Current: 14.88
During the past years, Microsoft's highest Cyclically Adjusted PB Ratio was 26.78. The lowest was 7.27. And the median was 17.82.
LIM:MSFT's Cyclically Adjusted PB Ratio is ranked worse than 94.68% of 1598
companies
in the Software industry
Industry Median: 2.325
vs LIM:MSFT: 14.88
The Shiller PE Ratio was first used by professor Robert Shiller. He uses E10 for his Shiller PE Ratio calculation. E10 is the average of the inflation adjusted earnings per share of a company over the past 10 years. The similar calculation is applied by GuruFocus to calculate the Cyclically Adjusted PB Ratio. The Cyclically Adjusted Book per Share is the average of the inflation adjusted book value per share of a company over the past 10 years.
Microsoft's adjusted book value per share data for the three months ended in Mar. 2026 was $55.777. Add all the adjusted book value per share for the past 10 years together and divide the count will get our Cyclically Adjusted Book per Share, which is $25.88 for the trailing ten years ended in Mar. 2026.
Shiller PE for Stocks: The True Measure of Stock Valuation
Microsoft (LIM:MSFT) Cyclically Adjusted PB Ratio Explanation
Compared with the regular PB Ratio, which works poorly for cyclical businesses, the Cyclically Adjusted PB Ratio smoothed out the fluctuations of book value during business cycles. Therefore it is more accurate in reflecting the valuation of the company.
If a company has consistent business performance, the Cyclically Adjusted PB Ratio should give similar results to regular PB Ratio.
Microsoft Cyclically Adjusted PB Ratio Related Terms
Microsoft Cyclically Adjusted PB Ratio Historical Data
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The historical data trend for Microsoft's Cyclically Adjusted PB Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LIM:MSFT vs ORCL, PLTR, PANW: Cyclically Adjusted PB Ratio Comparison
For the Software - Infrastructure subindustry, Microsoft's Cyclically Adjusted PB Ratio, along with its competitors' market caps and Cyclically Adjusted PB Ratio 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 Cyclically Adjusted PB Ratio vs Software Industry
For the Software industry and Technology sector, Microsoft's Cyclically Adjusted PB Ratio distribution charts can be found below:
* The bar in red indicates where Microsoft's Cyclically Adjusted PB Ratio falls into.
Microsoft Cyclically Adjusted PB Ratio Calculation
Like the Shiller PE Ratio, the Cyclically Adjusted PB Ratio takes the Book Value per Share from the past 10 years, adjusts it for inflation, and then calculates the average. This average is then used for the P/B calculation. Because it considers this 10-year average, it's often referred to as the CAPB Ratio.
The Shiller PE Ratio was first used by professor Robert Shiller to measure the valuation of the overall market. The similar calculation is applied by GuruFocus to calculate the Cyclically Adjusted PB Ratio.
Microsoft's Cyclically Adjusted PB Ratio for today is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Please note that we use the CPI data of the country/region where the company is headquartered. If the CPI data for that country/region is not available, then we will use the CPI data of the United States as default.
What does a Cyclically Adjusted PB Ratio of 14.91 mean?
Microsoft (LIM:MSFT) has a Cyclically Adjusted PB Ratio of 14.91 as of Jul. 12, 2026. Cyclically Adjusted PB Ratio is the ratio of share price to a company's inflation-adjusted book value per share over a 10-year period. View historical data on Microsoft and its competitors. This is 16% below median its historical median of 17.82. Over the past decade, Microsoft's Cyclically Adjusted PB Ratio has ranged from 7.27 to 26.78. According to the industry distribution chart, Microsoft ranks #1513 out of 1598 companies in the Software industry, placing it in the top 94.7%.
Is Microsoft's Cyclically Adjusted PB Ratio too high?
Microsoft's current Cyclically Adjusted PB Ratio of 14.91 is 16% below median its 10-year median of 17.82. Over the past 10 years, this metric has ranged from a low of 7.27 to a high of 26.78. The Software industry median Cyclically Adjusted PB Ratio is 2.33. Microsoft's value of 14.91 is 541.3% above this industry median. Based on the distribution chart, Microsoft ranks #1513 out of 1598 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, Microsoft has a GF Score™ of 98/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Microsoft's Cyclically Adjusted PB Ratio compare to ORCL and PLTR?
According to the Software industry distribution chart, Microsoft ranks #1513 out of 1598 companies for Cyclically Adjusted PB Ratio. This places Microsoft in the lower half of its industry. The industry median Cyclically Adjusted PB Ratio is 2.33. Microsoft's value of 14.91 is 541.3% above this benchmark. Historically, Microsoft's own Cyclically Adjusted PB Ratio has ranged from 7.27 to 26.78 over the past decade. While the company's 10-year median is 17.82 vs. the industry median of 2.33, Microsoft has consistently been above 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 Cyclically Adjusted PB Ratio for a Software company?
The median Cyclically Adjusted PB Ratio among Software companies is 2.33, based on 1,598 companies in the industry. Companies in the top quartile (top 25%) have a Cyclically Adjusted PB Ratio significantly above this median, while those in the bottom quartile fall well below. However, Cyclically Adjusted PB Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microsoft's current Cyclically Adjusted PB Ratio of 14.91 is 541.3% above 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 Cyclically Adjusted PB Ratio mean?
A high Cyclically Adjusted PB Ratio can signal that a stock is expensive relative to its fundamentals. Cyclically Adjusted PB Ratio is the ratio of share price to a company's inflation-adjusted book value per share over a 10-year period. View historical data on Microsoft and its competitors. For the Software industry, the median Cyclically Adjusted PB Ratio is 2.33 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microsoft's current Cyclically Adjusted PB Ratio is 14.91, which is 16% below median its own 10-year median of 17.82. 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 (LIM:MSFT) is currently considered Significantly Undervalued. The stock's GF Value™ is $562.96, compared to a current price of $386.00 — trading 31.4% below its estimated fair value. The current Cyclically Adjusted PB Ratio is 14.91, which is 16% below median its 10-year median of 17.82 and 541.3% above the Software industry median of 2.33. Microsoft's overall GF Score™ is 98/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Cyclically Adjusted PB Ratio calculated?
Cyclically Adjusted PB Ratio is calculated from a company's financial statements. For Microsoft (LIM:MSFT), the current Cyclically Adjusted PB Ratio is 14.91 as of Jul. 12, 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 (LIM:MSFT) Overvalued in 2026?
Based on GuruFocus' analysis, Microsoft stock appears to be undervalued.
The current stock price of $386.00 is trading 31.4% below its estimated GF Value™ of $562.96.
GuruFocus considers Microsoft to be Significantly Undervalued.
Key valuation signals for LIM:MSFT:
Cyclically Adjusted PB Ratio: 14.91 (16% below median its 10-year median of 17.82)
GF Value™: $562.96 vs. price of $386.00 (31.4% below fair value)
Industry Position: 541.3% above the Software median (#1513 of 1598)
No single metric tells the full story. See the LIM: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).
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