Microsoft Corporation (MSFT) DCF Valuation
Transparent DCF models put Microsoft Corporation (MSFT)'s fair value in a range of $147.40 – $299.83 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $403.41 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $403.41, the market is pricing in roughly +18.6%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +6.3%. The price is betting on acceleration above its track record.
Current Price
$403.41
Fair-Value Range
$147.40 – $299.83
Market-Implied Growth
+18.6%/yr
vs +6.3% 5Y actual
MSFT DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $67.6B · 7.43B shares · net debt $12.9B
Estimated Fair Value
$147.40
-63.5% vs $403.41
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $403.41; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $184 | $193 | $204 | $218 | $234 |
| 9.0% | $157 | $164 | $171 | $180 | $191 |
| 10.0% | $138 | $142 | $147 | $153 | $160 |
| 11.0% | $122 | $125 | $129 | $133 | $138 |
| 12.0% | $109 | $112 | $115 | $118 | $121 |