<div id="readability-page-1"><div>Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Microsoft MSFT in comparison to its major competitors within the Software industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.<h3>Microsoft Background</h3>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).<table><thead><tr><th>Company</th><th>P/E</th><th>P/B</th><th>P/S</th><th>ROE</th><th>EBITDA (in billions)</th><th>Gross Profit (in billions)</th><th>Revenue Growth</th></tr></thead><tbody><tr><td>Microsoft Corp</td><td>34.31</td><td>10.74</td><td>12.21</td><td>8.87%</td><td>$38.23</td><td>$45.49</td><td>16.04%</td></tr><tr><td>Oracle Corp</td><td>49.16</td><td>48.87</td><td>10.03</td><td>30.01%</td><td>$5.44</td><td>$9.4</td><td>6.86%</td></tr><tr><td>ServiceNow Inc</td><td>159.34</td><td>22.72</td><td>20.30</td><td>4.81%</td><td>$0.67</td><td>$2.21</td><td>22.25%</td></tr><tr><td>Palo Alto Networks Inc</td><td>53.97</td><td>24.87</td><td>17.33</td><td>7.42%</td><td>$0.39</td><td>$1.62</td><td>12.09%</td></tr><tr><td>CrowdStrike Holdings Inc</td><td>507.46</td><td>30.09</td><td>24.73</td><td>1.75%</td><td>$0.12</td><td>$0.73</td><td>31.74%</td></tr><tr><td>Fortinet Inc</td><td>46.46</td><td>78.03</td><td>12.48</td><td>90.26%</td><td>$0.66</td><td>$1.24</td><td>13.0%</td></tr><tr><td>Gen Digital Inc</td><td>29.74</td><td>8.65</td><td>4.82</td><td>7.92%</td><td>$0.51</td><td>$0.78</td><td>3.07%</td></tr><tr><td>Monday.Com Ltd</td><td>605</td><td>13.36</td><td>14.75</td><td>-1.28%</td><td>$-0.02</td><td>$0.23</td><td>32.67%</td></tr><tr><td>Dolby Laboratories Inc</td><td>30.48</td><td>3.16</td><td>6.26</td><td>2.39%</td><td>$0.07</td><td>$0.27</td><td>4.9%</td></tr><tr><td>CommVault Systems Inc</td><td>43.39</td><td>26.91</td><td>8.59</td><td>5.56%</td><td>$0.02</td><td>$0.19</td><td>16.06%</td></tr><tr><td>QXO Inc</td><td>28.05</td><td>1.44</td><td>25.56</td><td>-0.21%</td><td>$-0.03</td><td>$0.01</td><td>-2.0%</td></tr><tr><td>Qualys Inc</td><td>32.46</td><td>11.97</td><td>9.31</td><td>10.53%</td><td>$0.05</td><td>$0.13</td><td>8.36%</td></tr><tr><td>Teradata Corp</td><td>35.26</td><td>22.95</td><td>1.65</td><td>32.0%</td><td>$0.08</td><td>$0.27</td><td>0.46%</td></tr><tr><td>Progress Software Corp</td><td>36.08</td><td>6.77</td><td>4.16</td><td>6.88%</td><td>$0.06</td><td>$0.15</td><td>2.11%</td></tr><tr><td>SolarWinds Corp</td><td>59</td><td>1.62</td><td>2.83</td><td>0.94%</td><td>$0.07</td><td>$0.18</td><td>5.5%</td></tr><tr><td>Average</td><td>122.56</td><td>21.53</td><td>11.63</td><td>14.21%</td><td>$0.58</td><td>$1.24</td><td>11.22%</td></tr></tbody></table>When closely examining Microsoft, the following trends emerge: <ul><li>The stock's Price to Earnings ratio of 34.31 is lower than the industry average by 0.28x, suggesting potential value in the eyes of market participants.</li><li>The current Price to Book ratio of 10.74, which is 0.5x the industry average, is substantially lower than the industry average, indicating potential undervaluation.</li><li>The Price to Sales ratio of 12.21, which is 1.05x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.</li><li>With a Return on Equity (ROE) of 8.87% that is 5.34% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.</li><li>The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.23 Billion, which is 65.91x above the industry average, indicating stronger profitability and robust cash flow generation.</li><li>Compared to its industry, the company has higher gross profit of $45.49 Billion, which indicates 36.69x above the industry average, indicating stronger profitability and higher earnings from its core operations.</li><li>The company's revenue growth of 16.04% is notably higher compared to the industry average of 11.22%, showcasing exceptional sales performance and strong demand for its products or services.</li></ul><h3>Debt To Equity Ratio</h3><img src="https://imageproxy.pbkrs.com/https://www.benzinga.com/files/images/story/2024/1732201216_0_0.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="500" height="400" original-src="https://imageproxy.pbkrs.com/https://www.benzinga.com/files/images/story/2024/1732201216_0_0.png"/>The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.When evaluating Microsoft alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:<ul><li>Microsoft demonstrates a stronger financial position compared to its top 4 peers in the sector.</li><li>With a lower debt-to-equity ratio of 0.21, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.</li></ul><h3>Key Takeaways</h3>For Microsoft in the Software industry, the PE and PB ratios suggest the stock is undervalued compared to peers, indicating potential for growth. However, the high PS ratio implies the stock may be overvalued based on revenue. In terms of ROE, EBITDA, gross profit, and revenue growth, Microsoft shows strong performance, outperforming industry peers and demonstrating solid financial health.This article was generated by Benzinga's automated content engine and reviewed by an editor.</div></div>

MSFT

This article evaluates Microsoft against its peers in the software industry, analyzing financial metrics, market position, and growth potential. Key findings include Microsoft's lower Price to Earnings and Price to Book ratios compared to industry averages, indicating potential undervaluation. However, its Price to Sales ratio suggests possible overvaluation. Microsoft shows strong performance with higher EBITDA, gross profit, and revenue growth than peers, alongside a favorable debt-to-equity ratio of 0.21, indicating a solid financial position. Overall, the analysis highlights Microsoft's strengths and potential for growth in a competitive market.

- The article analyzes Microsoft’s performance in the Software industry, comparing it to major competitors using key financial metrics.  
- It highlights that Microsoft has a lower Price to Earnings and Price to Book ratio than the industry average, suggesting potential undervaluation, while its Price to Sales ratio indicates possible overvaluation.  
- Additionally, Microsoft shows strong profitability and revenue growth, outperforming peers, and maintains a healthier financial position with a lower debt-to-equity ratio.

Evaluating Microsoft Against Peers In Software Industry