MSFTBULLISH

MSFT EV/EBITDA Analysis

19.8x

Higher than 51% of Technology sector peers

Updated 28h ago·SEC filings & market data

Key Takeaway

Microsoft's EV/EBITDA of 18.6x means investors pay $18.60 for every $1 of operating earnings before interest, taxes, depreciation, and amortization — a common way to gauge how expensive a company is relative to its cash-generating power.

Sector Performance

51th percentile

MSFT

19.8x

Sector Median

19.5x

Sector Avg

44.5x

Prior Period

18.9x(Aug 2026)

↓ Declining

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Deep Analysis

At 18.6x, it sits just below the sector median of 18.9x, placing it at the 49th percentile among technology peers — essentially in the middle of the pack, neither cheap nor pricey versus competitors. The year-over-year change is N/A, but quarter-over-quarter the metric fell 3.9%, from 19.4x to 18.6x, showing the valuation has become somewhat less demanding in the latest period. Because the level matches the sector norm and the recent trend is downward, the stock appears fairly valued with a slight easing of the premium, which reduces the risk of overpaying while leaving limited margin for multiple expansion. This combination supports the overall BULLISH verdict: the valuation is not a headwind, and a mild contraction in EV/EBITDA alongside stable fundamentals can offer room for upside. Thus, the metric does not contradict the bullish stance; it aligns by showing a reasonable entry point relative to peers.

Frequently Asked Questions

What does the EV/EBITDA tell investors about MSFT?

A valuation multiple preferred by analysts for capital-intensive or leveraged businesses. Useful for cross-sector comparisons where earnings can be distorted by debt.

How is the EV/EBITDA calculated?

EV/EBITDA is calculated as: Enterprise Value / EBITDA.

How does MSFT's EV/EBITDA compare to its sector?

MSFT's EV/EBITDA of 19.8x compares to a Technology sector median of 19.5x, placing it in the 51th percentile.

Who are MSFT's closest peers by EV/EBITDA?

The closest Technology peers by EV/EBITDA include: AMAT (19.3x), CRM (18.5x), SQ (18.2x), ADI (24.2x), APH (24.5x).

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Learn More About EV/EBITDA

EV/EBITDA Explained: The Valuation Metric Pro Investors Actually Use

Learn what EV/EBITDA is, why it beats P/E for capital-heavy companies, typical sector ranges, and key limitations every serious investor should know.

The Formula

Enterprise Value / EBITDA

Why It Matters

A valuation multiple preferred by analysts for capital-intensive or leveraged businesses. Useful for cross-sector comparisons where earnings can be distorted by debt.