Full StockGeniuses Multi-Model Analysis Example: Microsoft
A full Microsoft stock analysis should not begin by asking whether six model families agree that the shares are attractive.
They are not voting on one question.
A conservative value screen asks whether earnings and book equity support the market price. A GARP model compares earnings growth with the price paid for those earnings. A trend template checks market structure. A dividend model values distributed cash. A financial-health model measures accounting direction. Analyst Sentiment describes institutional stance and change.
These outputs can disagree without creating a contradiction. Each model has its own inputs, eligibility rules, and definition of a useful answer.
This article applies the StockGeniuses research architecture to Microsoft using public evidence available through August 3, 2026. It begins with Core Metrics and four descriptive pillars, then applies one representative lens from each model family. It calculates an output only when the public evidence satisfies the model’s documented inputs. Where it does not, the output remains unavailable.
That is what full means here: every analytical layer is handled, including the layers that should not produce a number. Full coverage is not the same as a complete set of scores.
This is an independent educational reconstruction, not a live export from the StockGeniuses application. It is not a recommendation, target price, or current investment thesis on Microsoft.
Freeze the evidence before interpreting it
Microsoft released fiscal-year 2026 results after the market closed on July 29, 2026. The fiscal year ended June 30, while the market and analyst snapshot used here ends on August 3.
That date separation matters. Pairing June financial statements with a pre-earnings share price would ignore the market’s response to information released in July. Pairing the same financials with a later price without naming the date would make the valuation and growth calculations difficult to reproduce.
The evidence boundary is:
| Evidence layer | Cutoff used | Primary role |
|---|---|---|
| FY2026 company results | June 30, 2026 fiscal year; released July 29 | Current income statement, balance sheet, and cash-flow inputs |
| FY2025 comparison | June 30, 2025 | Year-over-year pillar and Piotroski comparisons |
| Five-year history | FY2021 through FY2026 | Revenue and EPS growth context |
| Dividend history | FY2022 through FY2026 | Gordon Growth Model history |
| Market price | August 3, 2026 close | T-1 price for market-sensitive calculations |
| Government yield | July 31, 2026 | Most recent available official 10-year rate before the August 3 market cutoff |
| Analyst snapshot | August 3, 2026 | Coverage distribution and recent change flow |
The main financial source is Microsoft’s FY2026 fourth-quarter and full-year earnings release. Those figures were presented as unaudited at the snapshot date. The audited Microsoft FY2025 Form 10-K supplies the prior-year filing context. Historical endpoints come from Microsoft’s published annual results, including the FY2021 release.
All dollar figures below are in US dollars. Financial-statement amounts are in billions unless stated otherwise.
An orientation summary, not a verdict
Microsoft’s FY2026 evidence contains four prominent features.
First, the operating business expanded quickly. Revenue reached $331.839 billion, up 18%, while operating income reached $155.237 billion, up 21%. GAAP diluted EPS was $17.95, up 32%.
Second, the GAAP earnings line requires context. Microsoft reported that net gains related to its OpenAI investment increased full-year net income by $4.963 billion and diluted EPS by $0.67. The gains are part of reported GAAP earnings, but they are not the same thing as operating profit from Azure, Microsoft 365, Windows, gaming, or other business lines.
Third, cash generation and reinvestment moved in different directions. Operating cash flow rose to $182.935 billion. Additions to property and equipment reached $115.948 billion. A simple operating-cash-flow-minus-capital-expenditure proxy therefore fell to $66.987 billion from $71.611 billion in FY2025 despite higher operating cash flow. This proxy subtracts all property-and-equipment additions; it does not separate maintenance spending from growth investment.
Fourth, the market repriced the evidence rapidly. Microsoft’s stock-price lookup reports a July 28 close of $393.35. The August 3 close was $487.65, a roughly 24% increase across those two endpoints. The Associated Press reported a 15.5% gain on July 30 alone, Microsoft’s strongest day in nearly 18 years, after the results and spending outlook were released. That movement changes price-sensitive models even though the June financial statements did not change.
None of these facts answers whether the stock should be owned. They establish the evidence that the pillars and models are allowed to interpret.
Four descriptive pillars come before the models
Core Metrics in stock analysis are descriptive inputs. They should not quietly become a fair-value conclusion, quality score, risk label, or timing signal before a model defines the job.
The four StockGeniuses pillars organize those facts into business quality, financial strength, market structure, and historical context.
Pillar 1: Financial Quality and Business Strength
Microsoft’s current operating evidence is strong in several places, but the cash-flow conversion read is more demanding than the income-statement read.
| Pillar 1 metric | FY2026 | FY2025 | What changed |
|---|---|---|---|
| Revenue | $331.839B | $281.724B | Increased 17.8% |
| Gross margin | 67.94% | 68.82% | Declined 0.88 percentage points |
| Operating margin | 46.78% | 45.62% | Increased 1.16 percentage points |
| Simplified free-cash-flow margin | 20.19% | 25.42% | Declined as capital spending increased |
| Operating cash flow / net income | 1.37x | 1.34x | Cash from operations exceeded reported net income |
| Capital expenditure / revenue | 34.94% | 22.91% | Reinvestment intensity increased sharply |
| R&D / revenue | 10.72% | 11.53% | Remained substantial, with revenue growing faster |
The gross-margin decline and operating-margin expansion can coexist. Gross margin describes the economics after cost of revenue. Operating margin also reflects the relationship among gross profit, R&D, sales and marketing, and general administrative spending. Microsoft produced greater operating leverage below gross profit even as gross margin compressed modestly.
Cash conversion also needs two readings. Operating cash flow was 1.37 times net income, and accruals measured as net income minus operating cash flow divided by assets were approximately negative 6.49%. Those figures do not suggest that reported profit exceeded operating cash generation.
The simplified free-cash-flow proxy tells a different story. It fell 6.5% while capital expenditure rose 79.6%. That does not automatically describe weak cash quality. It describes a year in which infrastructure investment absorbed much more of the cash generated by operations. Whether that spending creates sufficient future cash flow is a return-on-investment question, not something the current free-cash-flow margin can settle.
A simplified return-on-invested-capital reconstruction is approximately 27.1% using after-tax operating income, current and long-term debt, equity, and cash and cash equivalents. The calculation is useful as orientation, not as an exact app output. Including short-term investments in the cash offset, using average invested capital, or normalizing the tax rate would change it.
The Pillar 1 conclusion is therefore specific: Microsoft produced high operating profitability and expanding operating income while accepting materially heavier capital requirements. Whether those investments earn adequate future returns is not answered by the current margin table.
Pillar 2: Financial Strength and Risk Signals
The balance sheet shows substantial liquidity and low conventional leverage, but even here definitions matter.
| Pillar 2 metric | FY2026 | FY2025 | Reading |
|---|---|---|---|
| Current ratio | 1.23x | 1.35x | Positive, but lower year over year |
| Total debt / equity | 0.09x | Not used for signal | Low relative to reported equity |
| Total debt / assets | 5.31% | Not used for signal | Limited balance-sheet debt weight |
| Operating cash flow / total debt | 4.54x | Not used for signal | Current operating cash flow exceeded total debt several times |
| Simplified free cash flow / total debt | 1.66x | Not used for signal | Positive after the elevated capex deduction |
| Quick-ratio reconstruction | 0.93x | Not used for signal | Cash, short-term investments, and receivables nearly matched current liabilities |
Microsoft reported $40.294 billion of current and long-term debt, $20.935 billion of cash and cash equivalents, and $55.908 billion of short-term investments.
Using cash and cash equivalents alone produces $19.359 billion of net debt. Including short-term investments produces $36.549 billion of net liquid holdings. The company did not change between those two calculations; the liquidity convention changed. Showing both is more useful than hiding the classification choice behind one label.
The current ratio declined because current liabilities grew faster than current assets. That movement later costs Microsoft one Piotroski point. It should not be converted into a distress claim. Low debt relative to equity, large liquid investments, and high cash-flow coverage provide broader context.
Pillar 2 describes resilience and changing liquidity. It does not prove that future infrastructure commitments are harmless, that all liquid investments are equivalent to cash, or that financial risk has disappeared.
Pillar 3: Price Action and Market Structure
Price action supplied the fastest-changing evidence in the snapshot.
Microsoft’s share price moved from $393.35 on July 28 to $487.65 on August 3. StockAnalysis recorded the August 3 close and a 4.93% gain that day. The AP market report documented the 15.5% post-earnings jump on July 30.
That is meaningful market evidence. It says investors rapidly changed the price they were willing to pay after the FY2026 results and guidance.
It is not enough to reproduce the StockGeniuses primary trend, intermediate trend, alignment state, relative-performance percentile, or Mark Minervini score. Those outputs require an aligned adjusted-close history, moving-average slopes and levels, 52-week position, recent price comparison, liquidity, and a governed cross-sectional relative-strength universe.
A large move can improve several conditions. It can also arrive before slower moving averages realign. Price strength is visible; exact trend-template qualification remains unverified.
This distinction is the practical lesson behind price action versus business quality: the stock and the business changed on different clocks.
Pillar 4: Historical Performance and Context
Microsoft’s five-year business record provides context for the current growth rates:
- Revenue increased from $168.088 billion in FY2021 to $331.839 billion in FY2026, a five-year CAGR of 14.57%.
- GAAP diluted EPS increased from $8.05 to $17.95, a five-year CAGR of 17.40%.
- FY2026 operating margin was 46.78%, above FY2025’s 45.62%.
- Gross margin declined from 68.82% to 67.94% in the latest year.
- The simplified free-cash-flow proxy declined from $71.611 billion to $66.987 billion as investment accelerated.
Historical context prevents one quarter or one annual growth percentage from carrying the whole narrative. It also prevents the five-year CAGR from becoming a forecast. The path included slower EPS growth in FY2023, renewed acceleration afterward, changing capital requirements, and an unusual investment gain in FY2026.
Pillar 4 answers what happened and how the latest year compares. It does not say that revenue or EPS will repeat the historical CAGR.
The six-family model coverage map
The broader stock analysis model comparison explains why model outputs should remain in their native forms. This Microsoft application uses one representative lens from each family.
| Family | Selected lens | Public reconstruction status | Native result in this snapshot |
|---|---|---|---|
| Value | Benjamin Graham Number | Calculated | $135.21 defensive anchor; 0.277 value-gap ratio |
| Growth | Peter Lynch GARP | Calculated | 3/10 GARP score |
| Momentum | Mark Minervini Trend Template | Withheld | Exact score unavailable without governed price and relative-strength data |
| Dividend & Income | Gordon Growth Model | Calculated | $97.07 income-value estimate; 1/10 score |
| Financial Health & Risk | Piotroski F-Score | Calculated | 6/9, Mixed |
| Sentiment | Analyst Sentiment | Directional only | Supportive ratings level and positive recent change flow; exact regime withheld |
The table is not a recommendation scorecard. Graham and GGM estimate narrow forms of value, but even those values are not interchangeable: one is anchored to earnings and book equity, while the other capitalizes the dividend stream. GARP and Piotroski are diagnostic scores on different scales. Minervini requires market qualification. Analyst Sentiment has no numeric aggregate by design.
Value lens: Microsoft through the Graham Number
The Benjamin Graham Number is reproducible because its operational inputs are narrow: a three-year median TTM EPS, latest book value per share, and T-1 market price.
Microsoft’s three annual TTM EPS endpoints were $11.80 for FY2024, $13.64 for FY2025, and $17.95 for FY2026. The median is $13.64. Using the median means the FY2026 OpenAI-related gain does not become the sole earnings anchor.
Latest book value per share is:
$442.387B equity / 7.427B shares = $59.56
The model calculation is:
Graham Number = sqrt(22.5 x $13.64 x $59.56) = $135.21
Against the August 3 price:
Value Gap = $135.21 / $487.65 = 0.277
The result says current earnings and accounting book equity support a much lower defensive anchor than the market price under this formula. It does not establish a complete Microsoft valuation.
Microsoft is exactly the kind of business that exposes the screen’s limitations. Internally developed software, cloud infrastructure economics, customer relationships, brand, ecosystem effects, and R&D-created intellectual capital are not fully represented by book value. Acquired goodwill and intangibles create additional accounting complexity.
The low ratio therefore has two jobs: preserve Graham’s strict earnings-and-equity discipline and reveal where that discipline may fit an intangible-heavy business poorly. It must not be translated into the claim that Microsoft is worth exactly $135.21.
Growth lens: the GARP score changed with the price
The Peter Lynch GARP model asks whether historical EPS growth is reasonably aligned with the current earnings multiple. It does not calculate intrinsic value.
The selected five-year GAAP EPS CAGR is:
($17.95 / $8.05)^(1/5) - 1 = 17.40%
At the August 3 closing price:
Trailing P/E = $487.65 / $17.95 = 27.17
PEG = 27.17 / 17.40 = 1.56
Under the StockGeniuses bands, a PEG above 1.50 and at or below 2.00 produces a base score of 2. The 17.40% growth rate is inside the model’s 10%-25% preferred range, adding one point.
The available five-year, three-year, and one-year EPS growth rates are 17.40%, 22.86%, and 31.60%. Their mean is 23.95%, and their population standard deviation is 5.85 percentage points, below the model’s erratic-growth threshold of 35.93 percentage points. Total debt to equity is approximately 0.09, below the first leverage-penalty threshold. No excessive-growth, erratic-growth, or leverage penalty applies.
| GARP component | Effect |
|---|---|
| PEG base score | 2 |
| Preferred growth-range bonus | +1 |
| Excessive-growth penalty | 0 |
| Erratic-growth penalty | 0 |
| Leverage penalty | 0 |
| Final GARP score | 3/10 |
The price date carries real weight. The same earnings history paired with a lower pre-earnings price would have produced a lower P/E and PEG. The post-results price increase changed the model before another financial statement was published.
The GAAP earnings basis also deserves attention. Microsoft’s FY2026 OpenAI-related net gain added $0.67 to EPS. The model correctly uses the governed GAAP history in this reconstruction, but the reader should not mistake every part of the 17.40% CAGR for recurring operating growth.
A 3/10 result describes the historical growth-to-price relationship under the selected inputs. It does not mean Microsoft’s business quality is 3/10, that future growth will be weak, or that the shares should be sold.
Momentum lens: why the score stays unavailable
The Mark Minervini Trend Template uses nine conditions involving the 50-day, 150-day, and 200-day moving averages, the direction of the 200-day average, 52-week range position, a 21-day price comparison, relative-strength percentile, and liquidity.
Public reporting establishes that Microsoft’s price response was powerful. It does not establish the exact nine-condition state on one governed adjusted-close series.
Most importantly, a relative-strength percentile is cross-sectional. It depends on Microsoft’s performance relative to an eligible stock universe. Broad market outperformance or a large earnings gap cannot be substituted for that percentile. Under the model rules, missing relative strength makes that condition fail; it does not give the analyst permission to estimate it from headlines.
The exact score is therefore withheld.
Withholding the score is not a negative momentum verdict. It is the correct completion state for the available evidence. A future run with the full adjusted-close history, benchmark alignment, liquidity data, and governed relative-strength universe could produce the score. Until then, the defensible observation is narrower: price strength improved sharply, while complete trend qualification remains unproven.
Dividend lens: GGM values only the distributed stream
Microsoft’s fiscal-year dividends per share were $2.48, $2.72, $3.00, $3.32, and $3.64 from FY2022 through FY2026. The current quarterly dividend is $0.91, confirmed by Microsoft Investor Relations, giving a forward annual dividend of $3.64.
The raw four-interval dividend CAGR across the five annual observations is 10.07%. The Gordon Growth Model caps the long-term growth assumption at 4%.
The official US Treasury yield curve reported a 4.75% 10-year rate on July 31. The StockGeniuses required-return rule uses the greater of the government yield plus 3% or a 7% floor:
Required return = max(4.75% + 3.00%, 7.00%) = 7.75%
The model then calculates:
GGM value = $3.64 / (7.75% - 4.00%) = $97.07
Valuation ratio = $97.07 / $487.65 = 0.199
The spread is 3.75%, above the 2% low-confidence guardrail. The ratio falls below 0.80, producing a GGM score of 1/10.
That output is not a declaration that Microsoft is broadly overvalued. GGM values a stable dividend stream. Microsoft’s current dividend is a small portion of the economic evidence because the company also reinvests heavily, retains earnings, and may return capital through other means. The model deliberately ignores most of those sources.
The 1/10 score says the distributed dividend stream alone supports little of the August 3 market price under the model’s conservative required return. It is a low score for dividend-supported value, not for Microsoft’s business quality or dividend safety. That narrow answer is useful precisely because it does not pretend to be a total-company DCF.
Financial-health lens: Piotroski reaches 6 out of 9
The Piotroski F-Score compares nine binary FY2026 and FY2025 accounting conditions.
| Signal | FY2026 comparison | Point |
|---|---|---|
| Positive net income | $133.749B | 1 |
| Positive operating cash flow | $182.935B | 1 |
| ROA improved | 17.64% vs 16.45% | 1 |
| Operating cash flow exceeded net income | $182.935B vs $133.749B | 1 |
| Long-term debt / assets declined | 4.10% vs 6.49% | 1 |
| Current ratio improved | 1.23x vs 1.35x | 0 |
| Shares did not increase | 7.427B vs 7.434B | 1 |
| Gross margin improved | 67.94% vs 68.82% | 0 |
| Asset turnover improved | 0.438x vs 0.455x | 0 |
| Piotroski F-Score | Six conditions passed | 6/9 |
StockGeniuses classifies 4-6 as Mixed. Microsoft sits at the upper edge of that band.
The failed signals are informative. Liquidity declined on the current-ratio test. Gross margin compressed. Asset turnover fell because the asset base grew faster than revenue, consistent with the year’s large infrastructure expansion.
The passed signals are also clear. Profit and operating cash flow were positive, ROA improved under the model’s endpoint convention, cash flow exceeded net income, long-term leverage fell, and shares did not increase.
The 6/9 result does not mean Microsoft has a 67% chance of financial health. It does not measure bankruptcy risk or value. It describes the direction of nine accounting conditions over one annual comparison.
Sentiment lens: supportive coverage after a rapid repricing
The August 3 S&P Global-based Microsoft analyst snapshot reported 56 analysts: 40 Strong Buy, 13 Buy, three Hold, and none in Sell or Strong Sell. Recent entries dated July 31 and August 3 included maintained Buy ratings and several higher price targets.
That is evidence of a supportive ratings level and positive recent target direction.
It is not enough to manufacture the exact StockGeniuses Analyst Sentiment regime. The canonical model requires a common 30-90 day observation window, normalized ratings, upgrade and downgrade flow, estimate-revision pressure, coverage breadth, and divergence handling. Public aggregators may update those fields on different schedules and may not expose every normalized input.
The directional read is therefore supportive, with high coverage and recent positive change flow. The exact regime remains withheld.
The price move adds another boundary. Consensus targets published before the earnings reaction may become stale when the stock reprices quickly. A target increase after the move may reflect new information, price anchoring, or both. Sentiment versus fundamentals remains a comparison of evidence layers, not a contest in which one layer gets to erase the others.
Why no family-level overall score appears
StockGeniuses category scores are not averages of whichever selected examples happen to appear in an article.
| Category | Canonical coverage rule | Coverage in this reconstruction | Overall score status |
|---|---|---|---|
| Value | At least 4 of 7 valid models | 1 selected model | Not calculated |
| Growth | At least 2 of 3 valid models | 1 selected model | Not calculated |
| Momentum | At least 2 of 3 valid models | Minervini output withheld | Not calculated |
| Dividend & Income | At least 1 of 2 meaningful models | 1 selected model | Not presented because this is not a full family run |
| Financial Health & Risk | At least 3 of 5 valid models | 1 selected model | Not calculated |
| Sentiment | No numeric category aggregate | One directional public read | Not applicable |
Inventing those overall scores would make the article look more complete while making the analysis less accurate.
This is the discipline behind learning how to read a stock analysis model: confirm the model’s eligibility, input basis, output contract, and coverage before reacting to its number.
Where the evidence converges and where it does not
Several parts of the Microsoft snapshot converge.
Revenue, operating income, operating margin, operating cash flow, ROA direction, leverage, and analyst coverage all provide constructive current evidence. The balance sheet carries substantial liquid investments and low debt relative to equity. Historical revenue and EPS growth were meaningful over five years.
Other parts create tension.
Capital expenditure absorbed much more cash, reducing the simplified free-cash-flow proxy despite stronger operations. Gross margin, current ratio, and asset turnover declined. GAAP EPS benefited from an investment gain. The share price moved roughly 24% between the July 28 and August 3 endpoints, making GARP less favorable and changing every price-based model. GGM and Graham Number produced low value ratios, but each excludes major parts of Microsoft’s economic model.
The useful synthesis is not which model wins. It is what question each model resolves and what remains open:
| Lens | Question answered in this snapshot | What remains unresolved |
|---|---|---|
| Graham Number | Earnings and accounting equity provide a limited defensive anchor relative to the market price | How much economic value the balance sheet omits in an intangible-heavy business |
| GARP | Historical EPS growth sits in a low scoring relationship to the post-earnings price | How much of the recent EPS path is recurring and what growth follows the current investment cycle |
| Minervini | No exact template score can be supported from the captured public evidence | Whether the post-earnings move satisfies the full trend and relative-strength conditions |
| GGM | The current dividend stream supports a small portion of the price under a conservative perpetuity | The value of retained earnings, reinvestment, and non-dividend capital returns |
| Piotroski | Six of nine annual accounting conditions passed, while three liquidity and efficiency signals failed | Whether the failed conditions improve as the expanded asset base begins producing returns |
| Analyst Sentiment | Coverage was broadly supportive and recent change flow was positive | The exact provider-normalized regime and the durability of revisions after repricing |
No arithmetic should combine $135.21, 3/10, unavailable, $97.07, 6/9, and supportive into one score. The units and questions are different. Disagreement is useful here because it identifies which assumption or evidence gap has to be investigated next.
What would change the next Microsoft snapshot
A disciplined analysis should define its next evidence triggers before the story changes again.
For Microsoft, the next review should watch:
- Cash conversion after the infrastructure build. Operating cash flow, property-and-equipment additions, and free-cash-flow margins will show whether revenue growth is translating into more post-investment cash.
- Returns on the larger asset base. ROIC and asset turnover will become more informative as new data-center capacity begins contributing to revenue and operating income.
- Operating versus non-operating earnings. OpenAI-related gains should remain separate from the recurring operating read when future EPS growth is interpreted.
- Gross-margin and operating-margin direction. Their latest divergence needs more than one annual observation before becoming a durable conclusion.
- Liquidity and commitments. Current liabilities, lease obligations, debt, cash, and short-term investments should be reviewed on a consistent basis.
- Post-gap market structure. The full adjusted-close series and relative-strength universe can determine whether the price jump becomes a qualified trend or a temporary discontinuity.
- Analyst revisions after the repricing. Estimate changes matter more than a supportive label that merely persists.
- Dividend and rate inputs. A new dividend policy or movement in the 10-year Treasury rate would change the GGM output even if the company remained operationally similar.
These are not price predictions. They are the conditions that would make the next analysis meaningfully different from this one.
A complete analysis can leave outputs empty
Microsoft is a useful multi-model example because the evidence does not collapse into one clean answer.
The operating business expanded. Reinvestment rose faster. The balance sheet remained well covered while one liquidity ratio declined. The market repriced the shares sharply. A growth-price model became less favorable. Two conservative formula outputs captured only narrow parts of an intangible-heavy business. The accounting trajectory was mixed-positive. Analyst coverage remained supportive.
The analytical gain does not come from deciding which model wins. It comes from identifying what each model was qualified to say, what it ignored, and which unanswered question explains the disagreement.
That is the purpose of a structured multi-model system. It does not remove uncertainty or produce permission to act. It makes the evidence, assumptions, missing inputs, and decision boundaries visible enough to inspect.
For this Microsoft snapshot, the most important output is not one number. It is the coverage map.