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Microsoft Stock Is Not Cheap: Drop To Multi-Year Lows Lik...
Paul Franke · 2026-06-20 · via All Articles on Seeking Alpha

Summary

  • Microsoft remains overvalued versus software peers, trading at 23x normalized earnings compared to Adobe's 11x, despite similar growth prospects.
  • Heavy selling pressure in the stock and weak free cash flow yield (2.6%) suggest further downside risk, with a realistic probability of new lows below $352 in 2026.
  • My view is to Sell/Avoid MSFT until price approaches $300, where a more attractive risk/reward profile may emerge for long-term buyers.
  • Analyst expectations for 15%+ annual sales and EPS growth rates between 2026-28 support eventual upside, but valuation and macro risks warrant caution until a more significant price correction.
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I know most analysts and investors are excited to buy Microsoft Corporation (MSFT) in the middle of 2026, after a major dump in the share quote. However, further downside cannot be ruled out. Why? Because other SaaS stocks have

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