I evaluate Microsoft Corporation (NASDAQ:MSFT) due to its robust FCF generation, rapid organic growth with minimal CAPEX, and the company’s strong position in the fast-growing cloud computing market. Under the strong leadership of Satya Nadella, the company prospered If they can continue their cloud (intelligent cloud) efforts, MSFT will become increasingly profitable due to the segment’s large margins. This profitability will result in significant free cash flow and give MSFT the funds it needs to innovate for years to come.
Financials (High P/E Guaranteed/WIDE MARGINS, ROBUST FCF, Low Leverage, Organic Growth)
MSFT’s high P/E is justified given its wide margins, robust FCF, minimal debt and continued organic growth. Microsoft is one of the most profitable technology companies in the industry and continues to expand its margins year after year. In 2021, the company had 42% EBIT…