MicrosoftXBUL:MSF 100 Operating Margin % is 46.33% as of Mar. 2026, which is 18% above its 10-year median of 39.31. GuruFocus rates XBUL:MSF with a GF Score™ of 100/100 and a GF Value™ of €489.14 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 2,818 Software companies, Microsoft ranks better than 98.62% on this metric.
Operating Margin % is calculated as Operating Income divided by its Revenue. Microsoft's Operating Income for the
three
months ended in Mar. 2026 was €33,214 Mil. Microsoft's Revenue for the
three
months ended in Mar. 2026 was €71,696 Mil. Therefore, Microsoft's Operating Margin % for the quarter that ended in Mar. 2026 was 46.33%.
Good Sign:
Microsoft Corp operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for Microsoft's Operating Margin % or its related term are showing as below:
XBUL:MSF'
s Operating Margin % Range Over the Past 10 Years
Min: 29.83 Med: 39.31 Max: 46.8
Current: 46.8
XBUL:MSF's Operating Margin % is ranked better than 98.62% of 2818
companies
in the Software industry
Industry Median: 3.875
vs XBUL:MSF: 46.80
Microsoft's 5-Year Average Operating Margin % Growth Rate was 3.60% per year.
Microsoft's Operating Income for the
three
months ended in Mar. 2026 was €33,214 Mil.
Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 was €128,002 Mil.
Microsoft (XBUL:MSF) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Microsoft Operating Margin % Related Terms
Microsoft Operating Margin % Historical Data
* Premium members only.
The historical data trend for Microsoft's Operating 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.
XBUL:MSF vs ORCL, PLTR, PANW: Operating Margin % Comparison
For the Software - Infrastructure subindustry, Microsoft's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Software Industry
For the Software industry and Technology sector, Microsoft's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Microsoft's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Microsoft's Operating Margin % for the fiscal year that ended in Jun. 2025 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.
Microsoft (XBUL:MSF) has a Operating Margin % of 46.33% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Microsoft and its competitors. This is 18% above median its historical median of 39.31. Over the past decade, Microsoft's Operating Margin % has ranged from 29.83 to 46.80. According to the industry distribution chart, Microsoft ranks #39 out of 2818 companies in the Software industry, placing it in the top 1.4%.
Is Microsoft's Operating Margin % too high?
Microsoft's current Operating Margin % of 46.33% is 18% above median its 10-year median of 39.31. Over the past 10 years, this metric has ranged from a low of 29.83 to a high of 46.80. The Software industry median Operating Margin % is 3.88. Microsoft's value of 46.33% is 1095.6% above this industry median. Based on the distribution chart, Microsoft ranks #39 out of 2818 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Microsoft has a GF Score™ of 100/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Microsoft's Operating Margin % compare to ORCL and PLTR?
According to the Software industry distribution chart, Microsoft ranks #39 out of 2818 companies for Operating Margin %. This places Microsoft in the top 1% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 3.88. Microsoft's value of 46.33% is 1095.6% above this benchmark. Historically, Microsoft's own Operating Margin % has ranged from 29.83 to 46.80 over the past decade. While the company's 10-year median is 39.31 vs. the industry median of 3.88, 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 Operating Margin % for a Software company?
The median Operating Margin % among Software companies is 3.88, based on 2,818 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microsoft's current Operating Margin % of 46.33% is 1095.6% 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Microsoft and its competitors. For the Software industry, the median Operating Margin % is 3.88 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microsoft's current Operating Margin % is 46.33%, which is 18% above median its own 10-year median of 39.31. 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 (XBUL:MSF) is currently considered Significantly Undervalued. The stock's GF Value™ is €489.14, compared to a current price of €327.75 — trading 33% below its estimated fair value. The current Operating Margin % is 46.33%, which is 18% above median its 10-year median of 39.31 and 1095.6% above the Software industry median of 3.88. Microsoft's overall GF Score™ is 100/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Microsoft (XBUL:MSF), the current Operating Margin % is 46.33% 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 (XBUL:MSF) Overvalued in 2026?
Based on GuruFocus' analysis, Microsoft stock appears to be undervalued.
The current stock price of €327.75 is trading 33% below its estimated GF Value™ of €489.14.
GuruFocus considers Microsoft to be Significantly Undervalued.
Key valuation signals for XBUL:MSF:
Operating Margin %: 46.33% (18% above median its 10-year median of 39.31)
GF Value™: €489.14 vs. price of €327.75 (33% below fair value)
Industry Position: 1095.6% above the Software median (#39 of 2818)
No single metric tells the full story. See the XBUL:MSF 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).
100GF Score
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