Microsoft Corporation (NASDAQ:MSFT) saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Microsoft's outlook and valuation to see if the opportunity still exists.

View our latest analysis for Microsoft

What's The Opportunity In Microsoft?

The stock seems fairly valued at the moment according to my valuation model. It's trading around 6.13% above my intrinsic value, which means if you buy Microsoft today, you'd be paying a relatively fair price for it. And if you believe that the stock is really worth $256.56, there's only an insignificant downside when the price falls to its real value. What's more, Microsoft's share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Microsoft look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 50% over the next couple of years, the future seems bright for Microsoft. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? MSFT's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you've been keeping tabs on MSFT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Microsoft, you'd also look into what risks it is currently facing. For example - Microsoft has 1 warning sign we think you should be aware of.

If you are no longer interested in Microsoft, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.