PE Buy/ Sell Zone Analysis for US Stocks

Is Microsoft Corporation in the Buy Zone or Sell Zone? See how many days this stock has traded above or below historically at its current PE (Price to Earnings) or P/BV (Price to Book Value). This is a reverse percentile score. Values close to 100% are bad while values close to 0% are good.

Note: Current PE of a stock may be impacted downward by adverse events. Investors should check for red flags before buying.

Analyze undervaluation/ overvaluation of Microsoft with current and 1 Year Forward PE

INSIGHT
Microsoft is undervalued at both current PE and future earnings estimates.
Right Now : Current PE vs 5 year Average PE
Undervalued
Fair price

Based on 5Yr Average PE

601.3
Upside

Current PE versus 5Yr Average PE

19.0 %
1 Year Forward : 5 Yr Average PE & Projected 1Yr Forward EPS*
Undervalued
Fair price

Based on 1Yr Forward EPS

659.4
Upside

5 Yr Average PE & 1Yr Forward EPS

30.5 %
Info: The Microsoft's current PE is 28.06 ,while its 5 year PE average is 33.4. Its forward PE based on analyst estimates is 25.6
Note: The forward PE ratio (or forward price-to-earnings ratio) is calculated by dividing the current share price of a company by the estimated(1Yr) future (“forward”) earnings per share (EPS) of that company.

Analyze undervaluation/ overvaluation of Microsoft Corporation with historical PE and PBV ratios

from 15 Sep, 2024 to 14 Sep, 2026

Restated PE

Buy Zone

30.1% into PE buy sell zone

% time spent below current PE
0 20 40 60 80 100
Strong upside potential
Gains already realized

Out of 501 days, Microsoft Corporation traded 151 (30.1%) days below the current PE of on Restated basis.

Originally Reported PE

Buy Zone

30.3% into PE buy sell zone

% time spent below current PE
0 20 40 60 80 100
Strong upside potential
Gains already realized

Out of 501 days, Microsoft Corporation traded 152 (30.3%) days below the current PE of on Originally Reported basis.

Note: This is a reverse percentile score. Values close to 100% are bad while values close to 0% are good. Days when PE is negative are not considered in the analysis
30.3%

Buy Zone

% Days traded below current PE

28.1
 

Current PE

31.8
 

Average PE

33.8
 

Median PE

659.4
 

Forward 1Y Price

25.6
 

Forward PE

19.8
 

Forward EPS

PE range Days traded in range % Days traded in range Days traded within & below range % Days traded within & below range
20-24
 52 10.4% 52 10.4%
24-26
Forward PE is 25.59
63 12.6% 115 23.0%
26-31
Current PE is 28.1
71 14.2% 186 37.1%
31-34
 74 14.8% 260 51.9%
34-35
 67 13.4% 327 65.3%
35-37
 101 20.2% 428 85.4%
37-38
 49 9.8% 477 95.2%
38-40
 24 4.8% 501 100.0%
Total 501 501
30.1%

Buy Zone

% Days traded below current PE

28.1
 

Current PE

31.9
 

Average PE

33.8
 

Median PE

659.4
 

Forward 1Y Price

25.6
 

Forward PE

19.8
 

Forward EPS

PE range Days traded in range % Days traded in range Days traded within & below range % Days traded within & below range
20-24
 52 10.4% 52 10.4%
24-26
Forward PE is 25.59
63 12.6% 115 23.0%
26-31
Current PE is 28.1
67 13.4% 182 36.3%
31-34
 75 15.0% 257 51.3%
34-36
 108 21.6% 365 72.9%
36-37
 57 11.4% 422 84.2%
37-38
 44 8.8% 466 93.0%
38-40
 35 7.0% 501 100.0%
Total 501 501

FAQ

  • What is the PE ratio?
    The Price to Earnings ratio (PE ratio) for a stock indicates how expensive or cheap a company’s share price is relative to its earnings.
    In its simplest form, the price to earnings ratio shows the amount an investor needs to pay to receive $1 of the company’s earnings.
    So if a company is trading at a PE of 25, it means that investors are willing to pay $25 for every $1 of current earnings. This suggests that investors are valuing the stock at 25 times its current earnings, and they expect future growth in earnings.
    The Price to Earnings ratio fluctuates depending on the sentiment of investors and analysts. A highly positive outlook on a company pushes the stock price up, raising the PE ratio (investors are willing to pay more for the same amount of earnings), while a negative sentiment brings the PE down (investors are willing to pay less for the same earnings).
  • What is the PE buy/sell zone?
    The PE buy/sell zone is calculated based on how many days a stock has traded at its current PE level.
    To do this, we compare the current PE to the stock’s historical PE performance, to find out how often (for how many days in the past) the stock has traded at its current PE value.
    If the stock has usually traded above its current PE level (it’s at a higher PE for the majority of trading days), then the stock is cheaper than usual and in the PE buy zone.
    If the stock has usually traded below its current PE level (it’s at a lower PE for the majority of trading days), then the stock is more expensive than usual and in the PE sell zone.
  • How is the PE buy sell zone useful?
    The PE buy sell zone tells you if a stock’s current PE level is unusually high or low, and if a stock doesn’t typically trade at that level. It helps investors identify stocks that are undervalued or overvalued in terms of their typical PE trading behavior.
    Investors should keep in mind that the buy zone/sell zone is not a foolproof buy or sell signal. For example, the PE of a stock may have fallen substantially due to adverse events or negative news. Or the PE may have risen sharply after the company has won new orders, made an acquisition, announced a buyback, or some other positive event. PE Buy/Sell Zone signals should be looked at in conjunction with other information.
  • Why are the number of days different for Restated and Originally Reported data?
    This can be because of any of the 2 following reasons:
    1. Days when PE is negative are not considered in the analysis. So if only 1 of the Restated or Originally Reported PE is negative and the other is not, then the days will be different
    2. Companies have reported Originally Reported data for limited period.
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