MicrosoftCHIX:MSFD -0.18%85 FCF Yield % is 2.62 as of Jun. 24, 2026, which is 12% below its 10-year median of 2.98. 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 2,865 Software companies, Microsoft ranks better than 57.94% on this metric.
FCF Yield % is calculated as Free Cash Flow divided by Market Capitalization. It is a financial solvency ratio that compares the free cash flow a company is expected to earn against its market value.
Similar to Earnings Yield %, FCF Yield % is financial solvency ratio. A lower ratio suggests a less attractive investment, indicating that investors might not receive substantial returns in proportion to their investment. Conversely, a high free cash flow yield signals that a company generates sufficient cash to comfortably meet its debts, obligations, and dividend payments, making it a promising investment choice.
Microsoft FCF Yield % Related Terms
Microsoft FCF Yield % Historical Data
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The historical data trend for Microsoft's FCF Yield % 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 Yield % Comparison
For the Software - Infrastructure subindustry, Microsoft's FCF Yield %, along with its competitors' market caps and FCF Yield % 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 Yield % vs Software Industry
For the Software industry and Technology sector, Microsoft's FCF Yield % distribution charts can be found below:
* The bar in red indicates where Microsoft's FCF Yield % 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 Yield % of 2.62 as of Jun. 24, 2026. FCF Yield is calculated as Free Cash Flow divided by Market Capitalization. View historical data on Microsoft and its competitors. This is 12% below median its historical median of 2.98. Over the past decade, Microsoft's FCF Yield % has ranged from 1.83 to 6.16. According to the industry distribution chart, Microsoft ranks #1205 out of 2865 companies in the Software industry, placing it in the top 42.1%.
Is Microsoft's FCF Yield % too high?
Microsoft's current FCF Yield % of 2.62 is 12% below median its 10-year median of 2.98. Over the past 10 years, this metric has ranged from a low of 1.83 to a high of 6.16. The Software industry median FCF Yield % is 0.84. Microsoft's value of 2.62 is 211.9% above this industry median. Based on the distribution chart, Microsoft ranks #1205 out of 2865 companies in the Software industry, which is above the industry midpoint. 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 Yield % compare to ORCL and PLTR?
According to the Software industry distribution chart, Microsoft ranks #1205 out of 2865 companies for FCF Yield %. This puts Microsoft in the upper half of its industry. The industry median FCF Yield % is 0.84. Microsoft's value of 2.62 is 211.9% above this benchmark. Historically, Microsoft's own FCF Yield % has ranged from 1.83 to 6.16 over the past decade. While the company's 10-year median is 2.98 vs. the industry median of 0.84, 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 Yield % for a Software company?
The median FCF Yield % among Software companies is 0.84, based on 2,865 companies in the industry. Companies in the top quartile (top 25%) have a FCF Yield % significantly above this median, while those in the bottom quartile fall well below. However, FCF Yield % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microsoft's current FCF Yield % of 2.62 is 211.9% 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 Yield % mean?
A high FCF Yield % can signal that a stock is expensive relative to its fundamentals. FCF Yield is calculated as Free Cash Flow divided by Market Capitalization. View historical data on Microsoft and its competitors. For the Software industry, the median FCF Yield % is 0.84 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microsoft's current FCF Yield % is 2.62, which is 12% below median its own 10-year median of 2.98. 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 Yield % is 2.62, which is 12% below median its 10-year median of 2.98 and 211.9% above the Software industry median of 0.84. 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 Yield % calculated?
FCF Yield % is calculated from a company's financial statements. For Microsoft (CHIX:MSFD), the current FCF Yield % is 2.62 as of Jun. 24, 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 Yield %: 2.62 (12% below median its 10-year median of 2.98)
GF Value™: €491.76 vs. price of €329.50 (33% below fair value)
Industry Position: 211.9% above the Software median (#1205 of 2865)
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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