MSFT PEG Ratio Analysis
Higher than 52% of Technology sector peers
Updated 81h ago·SEC filings & market data
Key Takeaway
The PEG ratio divides a stock’s price-to-earnings multiple by its expected earnings growth rate, so a value of 0.88x means Microsoft’s price is low relative to its growth outlook—below 1x generally signals undervaluation.
Sector Performance
52th percentileMSFT
0.85x
Sector Median
0.78x
Sector Avg
2.46x
Prior Period
0.88x(Aug 2026)
Deep Analysis
The PEG ratio divides a stock’s price-to-earnings multiple by its expected earnings growth rate, so a value of 0.88x means Microsoft’s price is low relative to its growth outlook—below 1x generally signals undervaluation.
Against sector peers, the 0.88x sits above the Technology median of 0.80x and at the 52nd percentile, placing it near the middle of the peer group. Trend data on a year-over-year basis is not available, but quarter-over-quarter the PEG rose 2.3% from 0.86x to 0.88x, indicating a slight valuation increase. The combination of an undervalued level with a mild upward drift implies some opportunity remains, though the discount to growth is slowly narrowing. This metric supports the overall BULLISH verdict because a PEG below 1x still points to attractive growth-adjusted value.
Frequently Asked Questions
What does the PEG Ratio tell investors about MSFT?
The PEG ratio adjusts P/E for expected growth. A PEG below 1.0 may signal undervaluation; above 2.0 may suggest the growth story is priced in.
How is the PEG Ratio calculated?
PEG Ratio is calculated as: P/E Ratio / EPS Growth Rate.
How does MSFT's PEG Ratio compare to its sector?
MSFT's PEG Ratio of 0.85x compares to a Technology sector median of 0.78x, placing it in the 52th percentile.
Who are MSFT's closest peers by PEG Ratio?
The closest Technology peers by PEG Ratio include: AVGO (0.71x), CRM (0.62x), PLTR (0.60x), MRVL (0.59x), ADI (0.49x).
Learn More About PEG Ratio
The Formula
P/E Ratio / EPS Growth Rate
Why It Matters
The PEG ratio adjusts P/E for expected growth. A PEG below 1.0 may signal undervaluation; above 2.0 may suggest the growth story is priced in.
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0.85x
Sector Median
0.78x
Sector Avg
2.46x
How MSFT's PEG Ratio compares to sector peers.
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