Microsoft Corporation shares have outperformed the S&P 500 in the past year, generating a total return of 42 percent.
Microsoft is still putting up impressive growth numbers. But with a $2.31 trillion market cap, some investors are wondering if there’s any value left in Microsoft stock.
Earnings
A price-to-earnings ratio (PE) is one of the most basic fundamental metrics for gauging a stock’s value. The lower the PE, the higher the value. For comparison, the S&P 500’s PE is currently at about 29.5, nearly double its long-term average of 15.6.
