MicrosoftCHIX:MSFD -0.18%85 FCF Margin % is 19.07% as of Mar. 2026, which is 37% below its 10-year median of 30.31. GuruFocus rates CHIX:MSFD with a GF Score™ of 85/100 and a GF Value™ of €491.76 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 2,811 Software companies, Microsoft ranks better than 89.54% on this metric.
FCF Margin % is calculated as Free Cash Flow divided by its Revenue. Microsoft's Free Cash Flow for the
three
months ended in Mar. 2026 was €13,670 Mil. Microsoft's Revenue for the
three
months ended in Mar. 2026 was €71,696 Mil. Therefore, Microsoft's FCF Margin % for the quarter that ended in Mar. 2026 was 19.07%.
The historical rank and industry rank for Microsoft's FCF Margin % or its related term are showing as below:
CHIX:MSFd'
s FCF Margin % Range Over the Past 10 Years
Min: 22.93 Med: 30.31 Max: 33.39
Current: 22.93
During the past 13 years, the highest FCF Margin % of Microsoft was 33.39%. The lowest was 22.93%. And the median was 30.31%.
CHIX:MSFd's FCF Margin % is ranked better than 89.54% of 2811
companies
in the Software industry
Industry Median: 2.4
vs CHIX:MSFd: 22.93
Microsoft FCF Margin % Related Terms
Microsoft FCF Margin % Historical Data
* Premium members only.
The historical data trend for Microsoft's FCF Margin % 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.
CHIX:MSFD vs ORCL, PLTR, PANW: FCF Margin % Comparison
For the Software - Infrastructure subindustry, Microsoft's FCF Margin %, along with its competitors' market caps and FCF Margin % 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 FCF Margin % vs Software Industry
For the Software industry and Technology sector, Microsoft's FCF Margin % distribution charts can be found below:
* The bar in red indicates where Microsoft's FCF Margin % falls into.
* 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.
Microsoft (CHIX:MSFD) has a FCF Margin % of 19.07% as of Mar. 2026. Free cash flow margin is the ratio of total free cash flow to net sales. View historical data on Microsoft and its competitors. This is 37% below median its historical median of 30.31. Over the past decade, Microsoft's FCF Margin % has ranged from 22.93 to 33.39. According to the industry distribution chart, Microsoft ranks #294 out of 2811 companies in the Software industry, placing it in the top 10.5%.
Is Microsoft's FCF Margin % too high?
Microsoft's current FCF Margin % of 19.07% is 37% below median its 10-year median of 30.31. Over the past 10 years, this metric has ranged from a low of 22.93 to a high of 33.39. The Software industry median FCF Margin % is 2.40. Microsoft's value of 19.07% is 694.6% above this industry median. Based on the distribution chart, Microsoft ranks #294 out of 2811 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Microsoft has a GF Score™ of 85/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Microsoft's FCF Margin % compare to ORCL and PLTR?
According to the Software industry distribution chart, Microsoft ranks #294 out of 2811 companies for FCF Margin %. This places Microsoft in the top 11% of its industry — outperforming the majority of peers. The industry median FCF Margin % is 2.40. Microsoft's value of 19.07% is 694.6% above this benchmark. Historically, Microsoft's own FCF Margin % has ranged from 22.93 to 33.39 over the past decade. While the company's 10-year median is 30.31 vs. the industry median of 2.40, 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 FCF Margin % for a Software company?
The median FCF Margin % among Software companies is 2.40, based on 2,811 companies in the industry. Companies in the top quartile (top 25%) have a FCF Margin % significantly above this median, while those in the bottom quartile fall well below. However, FCF Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microsoft's current FCF Margin % of 19.07% is 694.6% 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 FCF Margin % mean?
A high FCF Margin % can signal that a stock is expensive relative to its fundamentals. Free cash flow margin is the ratio of total free cash flow to net sales. View historical data on Microsoft and its competitors. For the Software industry, the median FCF Margin % is 2.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microsoft's current FCF Margin % is 19.07%, which is 37% below median its own 10-year median of 30.31. 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 (CHIX:MSFD) is currently considered Significantly Undervalued. The stock's GF Value™ is €491.76, compared to a current price of €329.50 — trading 33% below its estimated fair value. The current FCF Margin % is 19.07%, which is 37% below median its 10-year median of 30.31 and 694.6% above the Software industry median of 2.40. Microsoft's overall GF Score™ is 85/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is FCF Margin % calculated?
FCF Margin % is calculated from a company's financial statements. For Microsoft (CHIX:MSFD), the current FCF Margin % is 19.07% as of Mar. 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 (CHIX:MSFD) Overvalued in 2026?
Based on GuruFocus' analysis, Microsoft stock appears to be undervalued.
The current stock price of €329.50 is trading 33% below its estimated GF Value™ of €491.76.
GuruFocus considers Microsoft to be Significantly Undervalued.
Key valuation signals for CHIX:MSFD:
FCF Margin %: 19.07% (37% below median its 10-year median of 30.31)
GF Value™: €491.76 vs. price of €329.50 (33% below fair value)
Industry Position: 694.6% above the Software median (#294 of 2811)
No single metric tells the full story. See the CHIX:MSFD 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).
85GF Score
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