VYNN researchNasdaq: MSFTRun of 30 Sep 2026
Microsoft
fair value
On 30 Sep 2026, VYNN’s model valued Microsoft at $595.14 a share, 16.9% above the $508.96 price. A Buy, published with low confidence.
A dated research record. It does not update, and it is not investment advice.
- Price at the run
- $508.96
- VYNN fair value, 16.9% above the price
- $595.14
- Analysts' mean target, 52 analysts
- $577.26
- Rating, low confidence
- Buy
Price, model and analysts on one scale.
The two methods give $533.59 and $656.69. Their midpoint is the fair value. The price at the run sits below both.
52-week range$349.20 to $553.72
VYNN’s two methods$533.59 to $656.69
52 analysts’ targets$440.00 to $870.00
In VYNN’s rules a Buy is a fair value 15% to 30% above the price; Microsoft’s is 16.9% above. Confidence is low because both methods rest on one cash-flow forecast, and no independent peer-multiple method was available in this run.
What $508.96 asks of Microsoft.
A price is a forecast. This is the growth the market was paying for at the run.
At this price, revenue would have to grow about 11% a year for 10 years at the modeled margins; on the same measure, the model's analyst-based forecasts come to about 13% a year.
Read the other way: to justify the price, the business needs terminal free cash flow of $324.42B. The model has $349.13B, so the market is asking for 7.1% less than the model expects.
Two methods, one forecast.
Both discount the same ten years of free cash flow. They differ in how they value what comes after.
Perpetual growth
$533.59 a share
After year ten, cash flow grows 2.5% a year for good.
- Present value of free cash flows
- $1,322.98B
- Terminal value
- $2,583.01B
- Enterprise value
- $3,905.99B
- Equity value
- $3,962.17B
Exit multiple
$656.69 a share
In year ten, the business is valued at 19.7 times EBITDA.
- Exit multiple (EV/EBITDA)
- 19.7x
- Terminal enterprise value
- $7,896.76B
- Enterprise value
- $4,820.14B
- Equity value
- $4,876.31B
Fair value, the midpoint of the two$595.14
The cost of capital, built from published data
- Risk-free rate
- 5.02%
- US 10-year Treasury 5.26% (Yahoo, 29 Sep 2026), less the 0.23% US sovereign default spread (Moody's Aa1, Damodaran, Jan 2026)
- Equity risk premium
- 3.47%
- Mature-market premium 3.24%, implied by 74 S&P 500 prices, plus the 0.23% US country premium (Damodaran, Jan 2026)
- Levered beta
- 1.04
- 1.05 against the S&P 500 over 59 monthly returns, Nov 2021 to Sep 2026, Blume-adjusted
- Cost of equity
- 8.62%
- = risk-free + beta × premium
- Pre-tax cost of debt
- 5.66%
- Risk-free, plus the 0.23% sovereign spread, plus 0.40% for a synthetic AAA rating at 50.88x interest cover (Damodaran's rating table)
- Tax rate
- 18.72%
- Normalized cash tax rate, the same one used in the cash flows
- Equity weight
- 96.70%
- Market capitalisation over market capitalisation plus debt
- WACC
- 8.49%
- = equity cost × equity weight + after-tax debt cost × debt weight
What would change the answer.
The two assumptions a valuation leans on most, moved one step at a time.
| Cost of capital | Terminal growth | ||||
|---|---|---|---|---|---|
| 1.5% | 2.0% | 2.5% | 3.0% | 3.5% | |
| 7.49% | $574 | $611 | $655 | $708 | $775 |
| 7.99% | $524 | $553 | $588 | $630 | $682 |
| 8.49% | $481 | $505 | $534 | $567 | $607 |
| 8.99% | $444 | $464 | $487 | $515 | $547 |
| 9.49% | $411 | $428 | $448 | $470 | $496 |
The outlined cell is the model’s own case. Shaded cells are above the $508.96 price: 15 of the 25.
What the price and the analysts imply
| To arrive at | Cost of capital | or terminal growth |
|---|---|---|
| The model | 8.49% | 2.50% |
| The price, $508.96 | 8.74% | 2.07% |
| The analysts' mean target, $577.26 | 7.96% | 3.32% |
Each figure solves one assumption while the model’s cash flows and the other assumption stay fixed. A diagnostic, not a valuation.
The forecast behind it.
Four reported years, then the first five of the ten the model projects.
| Year | Revenue | Growth | Free cash flow |
|---|---|---|---|
| FY2023 | $211.91B | $59.48B | |
| FY2024 | $245.12B | 15.7% | $74.07B |
| FY2025 | $281.72B | 14.9% | $71.61B |
| FY2026 | $331.84B | 17.8% | $66.99B |
| Year 1Forecast | $391.04B | 17.8% | $51.11B |
| Year 2 | $467.27B | 19.5% | $81.81B |
| Year 3 | $548.44B | 17.4% | $126.81B |
| Year 4 | $632.06B | 15.2% | $181.81B |
| Year 5 | $715.01B | 13.1% | $246.21B |
Fiscal years end 30 June. Forecast years are the twelve months from 30 Jun 2026 onward. The first two match analysts' revenue estimates (50 and 51 analysts) by design, which the report says is not independent validation.
What the news adds.
VYNN read 14 dated articles from the 90 days before the run, the newest from 26 Sep 2026, and classed the tone as neutral. The price target is the model’s fair value; the news is the evidence beside it.
Catalysts
Reported Azure scale and strong cloud demand provide a substantial growth base, while planned standalone Azure revenue disclosure could improve investors' ability to assess performance.
A unified, enterprise-oriented Copilot could increase AI usage and create additional monetization opportunities across Microsoft's existing productivity and developer products.
Developing custom AI accelerators may improve Microsoft's control over cloud hardware costs, performance, and supply dependence.
Risks
Very high AI infrastructure investment could pressure cash flow and returns if capacity spending outpaces monetization.
Autonomous AI agents create safety and security risks, including unauthorized actions or failures of control, that could lead to customer harm, reputational damage, or regulatory scrutiny.
Intense cloud competition could constrain Azure's market-share gains, pricing, and returns on infrastructure investment.
Copilot's growth and monetization remain unproven at scale in the cited adoption-focused coverage, creating execution risk if enterprise customers do not deploy broadly or accept the pricing.
Xbox layoffs and uncertainty about its business model may disrupt execution and indicate that the gaming business has not yet established a stable growth model.
Each item is VYNN’s summary of dated articles, with the sources and quotations listed in the report’s appendix.
What VYNN checked before it published.
The value cleared the publication checks
The workbook's status reads Publishable: the deterministic valuation publication checks passed. Analysts' mean target points the same way as the model.
Confidence is stated as low, and why
The two methods share one cash-flow forecast, one discount rate and the same terminal economics, and no independent peer-multiple method was available. The report calls the result a scenario range, not an independently triangulated value.
Analysts' targets stay outside the value
Price targets and ratings are shown as a benchmark and are never averaged into the fair value. Analysts' revenue estimates do anchor the first two forecast years, and the report says so.
Prose that could not be supported was left out
Six claims in the written recommendation did not pass the claim-to-evidence check after rewrite attempts. The report omits that prose and prints the source headlines instead.
The files from this run.
Check any step, or change an assumption yourself.
- The research reportPDF, 32 pages
- The financial modelExcel, 10 tabs with live formulas
- Engine valuation-2026-09-27.1. Generated 30 Sep 2026, 05:13 UTC.