MicrosoftMSFT -3.46%92 3-Year RORE % is 16.51 as of Mar. 2026. GuruFocus rates MSFT with a GF Score™ of 92/100 and a GF Value™ of $558.08 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 2,536 Software companies, Microsoft ranks better than 64.94% on this metric.
Return on Retained Earnings (RORE) is an indicator of a company's growth potential, it shows how much a company earns by reinvesting its retained earnings, i.e. profits after dividend payments.
Microsoft's 3-Year RORE % for the quarter that ended in Mar. 2026 was 16.51%.
The industry rank for Microsoft's 3-Year RORE % or its related term are showing as below:
MSFT's 3-Year RORE % is ranked better than 64.94% of 2536
companies
in the Software industry
Industry Median: 3.01
vs MSFT: 16.51
Microsoft (NAS:MSFT) 3-Year RORE % Explanation
Return on Retained Earnings (RORE) is important to investors because it reveals a company's efficiency and growth potential. A higher RORE indicates a higher return. A high RORE indicates that the company should reinvest profits into the business. A lower RORE suggests that the company should distribute profits to shareholders by paying out dividends, since those dollars aren't generating much additional growth for the company.
There are a several different ways to arrive at the Return on Retained Earnings. The simplest way to calculate it is by using published information on Earnings per Share (EPS) and Dividend per Share (DPS) over a selected period. Here, 3-year period is chosen.
Be Aware
Please keep in mind that the RORE is relative to the nature of the business and its competitors. If another company in the same sector is producing a lower return on retained earnings, it doesn’t necessarily mean it’s a bad investment. It may just suggest the company is older and no longer in a high growth stage. At such a stage in the business cycle, it would be expected to see a lower RORE and higher dividend payout.
Microsoft 3-Year RORE % Related Terms
Microsoft 3-Year RORE % Historical Data
* Premium members only.
The historical data trend for Microsoft's 3-Year RORE % 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.
MSFT vs ORCL, PLTR, PANW: 3-Year RORE % Comparison
For the Software - Infrastructure subindustry, Microsoft's 3-Year RORE %, along with its competitors' market caps and 3-Year RORE % 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 RORE % vs Software Industry
For the Software industry and Technology sector, Microsoft's 3-Year RORE % distribution charts can be found below:
* The bar in red indicates where Microsoft's 3-Year RORE % 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.
In the calculation of 3-Year RORE %, the most recent and first period EPS (Diluted) is the trailing twelve months (TTM) data ended in Mar. 2026 and 3-year before.
Microsoft (MSFT) has a 3-Year RORE % of 16.51 as of Mar. 2026. 3-Year RORE % shows how much a company earns by reinvesting its retained earnings in 3-year. View historical data on Microsoft and its competitors. According to the industry distribution chart, Microsoft ranks #889 out of 2536 companies in the Software industry, placing it in the top 35.1%.
Is Microsoft's 3-Year RORE % too high?
Microsoft's current 3-Year RORE % is 16.51. The Software industry median 3-Year RORE % is 3.01. Microsoft's value of 16.51 is 448.5% above this industry median. Based on the distribution chart, Microsoft ranks #889 out of 2536 companies in the Software industry, which is above the industry midpoint. Overall, Microsoft has a GF Score™ of 92/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Microsoft's 3-Year RORE % compare to ORCL and PLTR?
According to the Software industry distribution chart, Microsoft ranks #889 out of 2536 companies for 3-Year RORE %. This puts Microsoft in the upper half of its industry. The industry median 3-Year RORE % is 3.01. Microsoft's value of 16.51 is 448.5% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year RORE % for a Software company?
The median 3-Year RORE % among Software companies is 3.01, based on 2,536 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year RORE % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year RORE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Microsoft's current 3-Year RORE % of 16.51 is 448.5% 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 3-Year RORE % mean?
A high 3-Year RORE % can signal that a stock is expensive relative to its fundamentals. 3-Year RORE % shows how much a company earns by reinvesting its retained earnings in 3-year. View historical data on Microsoft and its competitors. For the Software industry, the median 3-Year RORE % is 3.01 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Microsoft's current 3-Year RORE % is 16.51. 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 (MSFT) is currently considered Significantly Undervalued. The stock's GF Value™ is $558.08, compared to a current price of $352.83 — trading 36.8% below its estimated fair value. The current 3-Year RORE % is 16.51 and 448.5% above the Software industry median of 3.01. Microsoft's overall GF Score™ is 92/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year RORE % calculated?
3-Year RORE % is calculated from a company's financial statements. For Microsoft (MSFT), the current 3-Year RORE % is 16.51 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 (MSFT) Overvalued in 2026?
Based on GuruFocus' analysis, Microsoft stock appears to be undervalued.
The current stock price of $352.83 is trading 36.8% below its estimated GF Value™ of $558.08.
GuruFocus considers Microsoft to be Significantly Undervalued.
Key valuation signals for MSFT:
3-Year RORE %: 16.51
GF Value™: $558.08 vs. price of $352.83 (36.8% below fair value)
Industry Position: 448.5% above the Software median (#889 of 2536)
No single metric tells the full story. See the 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).
92GF Score
Get the complete analysis for MSFT
3-Year RORE % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
MSFT has been successfully added to your 
