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 fairly valued at current PE, but undervalued on future earnings estimates
Right Now : Current PE vs 5 year Average PE
Fairly Valued
Fair price

Based on 5Yr Average PE

490.6
Upside

Current PE versus 5Yr Average PE

3.3 %
1 Year Forward : 5 Yr Average PE & Projected 1Yr Forward EPS*
Undervalued
Fair price

Based on 1Yr Forward EPS

565.1
Upside

5 Yr Average PE & 1Yr Forward EPS

19.0 %
Info: The Microsoft's current PE is 33.64 ,while its 5 year PE average is 34.8. Its forward PE based on analyst estimates is 29.2
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 07 Jan, 2024 to 06 Jan, 2026

Restated PE

Strong Buy Zone

15.2% into PE buy sell zone

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

Out of 500 days, Microsoft Corporation traded 76 (15.2%) days below the current PE of on Restated basis.

Originally Reported PE

Strong Buy Zone

15.2% into PE buy sell zone

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

Out of 500 days, Microsoft Corporation traded 76 (15.2%) 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
15.2%

Strong Buy Zone

% Days traded below current PE

33.6
 

Current PE

35.6
 

Average PE

35.9
 

Median PE

565.1
 

Forward 1Y Price

29.2
 

Forward PE

16.3
 

Forward EPS

PE range Days traded in range % Days traded in range Days traded within & below range % Days traded within & below range
28-32
Forward PE is 29.21
44 8.8% 44 8.8%
32-33
 12 2.4% 56 11.2%
33-35
Current PE is 33.6
120 24.0% 176 35.2%
35-36
 84 16.8% 260 52.0%
36-37
 92 18.4% 352 70.4%
37-38
 79 15.8% 431 86.2%
38-39
 54 10.8% 485 97.0%
39-41
 15 3.0% 500 100.0%
Total 500 500
15.2%

Strong Buy Zone

% Days traded below current PE

33.6
 

Current PE

35.8
 

Average PE

36.1
 

Median PE

565.1
 

Forward 1Y Price

29.2
 

Forward PE

16.3
 

Forward EPS

PE range Days traded in range % Days traded in range Days traded within & below range % Days traded within & below range
28-32
Forward PE is 29.21
44 8.8% 44 8.8%
32-33
 12 2.4% 56 11.2%
33-35
Current PE is 33.6
108 21.6% 164 32.8%
35-36
 81 16.2% 245 49.0%
36-37
 94 18.8% 339 67.8%
37-38
 82 16.4% 421 84.2%
38-39
 61 12.2% 482 96.4%
39-41
 18 3.6% 500 100.0%
Total 500 500

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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