AFRM vs. MSFT: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at AFRM and MSFT, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
MSFT’s market capitalization of 3,707.65 billion USD is significantly greater than AFRM’s 22.30 billion USD, highlighting its more substantial market valuation.
AFRM’s beta of 3.58 points to significantly higher volatility compared to MSFT (beta: 1.03), suggesting AFRM has greater potential for both gains and losses relative to market movements.
| Symbol | AFRM | MSFT |
|---|---|---|
| Company Name | Affirm Holdings, Inc. | Microsoft Corporation |
| Country | US | US |
| Sector | Technology | Technology |
| Industry | Software - Infrastructure | Software - Infrastructure |
| CEO | Max Roth Levchin | Satya Nadella |
| Price | 69.19 USD | 498.84 USD |
| Market Cap | 22.30 billion USD | 3,707.65 billion USD |
| Beta | 3.58 | 1.03 |
| Exchange | NASDAQ | NASDAQ |
| IPO Date | January 13, 2021 | March 13, 1986 |
| ADR | No | No |
Historical Performance
This chart compares the performance of AFRM and MSFT by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
AFRM
-2.22%
Software - Infrastructure Industry
- Max
- 80.61%
- Q3
- 29.97%
- Median
- 2.84%
- Q1
- -8.35%
- Min
- -56.26%
AFRM has a negative Return on Equity of -2.22%. This indicates the company is generating a loss for its shareholders, which can be a result of unprofitability or negative shareholder equity and is often a sign of financial distress.
MSFT
32.74%
Software - Infrastructure Industry
- Max
- 80.61%
- Q3
- 29.97%
- Median
- 2.84%
- Q1
- -8.35%
- Min
- -56.26%
In the upper quartile for the Software - Infrastructure industry, MSFT’s Return on Equity of 32.74% signals a highly effective use of shareholder capital to drive profitability compared to most of its peers.
Return on Invested Capital
AFRM
-0.85%
Software - Infrastructure Industry
- Max
- 39.31%
- Q3
- 11.97%
- Median
- 1.67%
- Q1
- -7.10%
- Min
- -34.29%
AFRM has a negative Return on Invested Capital of -0.85%. This indicates that its operations are failing to generate a profit on the total capital invested, signaling significant inefficiency or value destruction.
MSFT
22.11%
Software - Infrastructure Industry
- Max
- 39.31%
- Q3
- 11.97%
- Median
- 1.67%
- Q1
- -7.10%
- Min
- -34.29%
In the upper quartile for the Software - Infrastructure industry, MSFT’s Return on Invested Capital of 22.11% signifies a highly effective use of its capital to generate profits when compared to its peers.
Net Profit Margin
AFRM
-2.07%
Software - Infrastructure Industry
- Max
- 46.46%
- Q3
- 14.65%
- Median
- 2.66%
- Q1
- -7.70%
- Min
- -35.45%
AFRM has a negative Net Profit Margin of -2.07%, indicating the company is operating at a net loss as its expenses exceeded its revenues.
MSFT
35.79%
Software - Infrastructure Industry
- Max
- 46.46%
- Q3
- 14.65%
- Median
- 2.66%
- Q1
- -7.70%
- Min
- -35.45%
A Net Profit Margin of 35.79% places MSFT in the upper quartile for the Software - Infrastructure industry, signifying strong profitability and more effective cost management than most of its peers.
Operating Profit Margin
AFRM
-2.53%
Software - Infrastructure Industry
- Max
- 48.51%
- Q3
- 16.56%
- Median
- 4.48%
- Q1
- -6.43%
- Min
- -40.18%
AFRM has a negative Operating Profit Margin of -2.53%. This signifies the company is unprofitable at the operational level, as its core business expenses exceed its revenue.
MSFT
45.23%
Software - Infrastructure Industry
- Max
- 48.51%
- Q3
- 16.56%
- Median
- 4.48%
- Q1
- -6.43%
- Min
- -40.18%
An Operating Profit Margin of 45.23% places MSFT in the upper quartile for the Software - Infrastructure industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
Profitability at a Glance
| Symbol | AFRM | MSFT |
|---|---|---|
| Return on Equity (TTM) | -2.22% | 32.74% |
| Return on Assets (TTM) | -0.60% | 17.18% |
| Return on Invested Capital (TTM) | -0.85% | 22.11% |
| Net Profit Margin (TTM) | -2.07% | 35.79% |
| Operating Profit Margin (TTM) | -2.53% | 45.23% |
| Gross Profit Margin (TTM) | 71.61% | 69.07% |
Financial Strength
Current Ratio
AFRM
63.09
Software - Infrastructure Industry
- Max
- 3.80
- Q3
- 2.25
- Median
- 1.51
- Q1
- 1.10
- Min
- 0.23
AFRM’s Current Ratio of 63.09 is exceptionally high, placing it well outside the typical range for the Software - Infrastructure industry. This indicates a very strong liquidity position, though such a high ratio may also suggest that the company is not using its assets efficiently to generate profits.
MSFT
1.37
Software - Infrastructure Industry
- Max
- 3.80
- Q3
- 2.25
- Median
- 1.51
- Q1
- 1.10
- Min
- 0.23
MSFT’s Current Ratio of 1.37 aligns with the median group of the Software - Infrastructure industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
AFRM
2.56
Software - Infrastructure Industry
- Max
- 2.56
- Q3
- 1.12
- Median
- 0.33
- Q1
- 0.05
- Min
- 0.00
AFRM’s leverage is in the upper quartile of the Software - Infrastructure industry, with a Debt-to-Equity Ratio of 2.56. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
MSFT
0.19
Software - Infrastructure Industry
- Max
- 2.56
- Q3
- 1.12
- Median
- 0.33
- Q1
- 0.05
- Min
- 0.00
MSFT’s Debt-to-Equity Ratio of 0.19 is typical for the Software - Infrastructure industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio
AFRM
-0.24
Software - Infrastructure Industry
- Max
- 32.21
- Q3
- 5.24
- Median
- 0.95
- Q1
- -17.99
- Min
- -50.82
AFRM has a negative Interest Coverage Ratio of -0.24. This indicates that its earnings were insufficient to cover even its operational costs, let alone its interest payments, signaling significant financial distress.
MSFT
49.43
Software - Infrastructure Industry
- Max
- 32.21
- Q3
- 5.24
- Median
- 0.95
- Q1
- -17.99
- Min
- -50.82
With an Interest Coverage Ratio of 49.43, MSFT demonstrates a superior capacity to service its debt, placing it well above the typical range for the Software - Infrastructure industry. This stems from either robust earnings or a conservative debt load.
Financial Strength at a Glance
| Symbol | AFRM | MSFT |
|---|---|---|
| Current Ratio (TTM) | 63.09 | 1.37 |
| Quick Ratio (TTM) | 63.09 | 1.36 |
| Debt-to-Equity Ratio (TTM) | 2.56 | 0.19 |
| Debt-to-Asset Ratio (TTM) | 0.71 | 0.11 |
| Net Debt-to-EBITDA Ratio (TTM) | 19.75 | 0.21 |
| Interest Coverage Ratio (TTM) | -0.24 | 49.43 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for AFRM and MSFT. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
AFRM
0.00%
Software - Infrastructure Industry
- Max
- 4.07%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AFRM currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
MSFT
0.65%
Software - Infrastructure Industry
- Max
- 4.07%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 0.65%, MSFT offers a more attractive income stream than most of its peers in the Software - Infrastructure industry, signaling a strong commitment to shareholder returns.
Dividend Payout Ratio
AFRM
0.00%
Software - Infrastructure Industry
- Max
- 48.68%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AFRM has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
MSFT
24.30%
Software - Infrastructure Industry
- Max
- 48.68%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
MSFT’s Dividend Payout Ratio of 24.30% is in the upper quartile for the Software - Infrastructure industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | AFRM | MSFT |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 0.65% |
| Dividend Payout Ratio (TTM) | 0.00% | 24.30% |
Valuation
Price-to-Earnings Ratio
AFRM
-360.51
Software - Infrastructure Industry
- Max
- 107.77
- Q3
- 54.40
- Median
- 28.10
- Q1
- 18.03
- Min
- 5.32
AFRM has a negative P/E Ratio of -360.51. This occurs when a company has negative earnings (a net loss), making the ratio unsuitable for valuation analysis.
MSFT
38.38
Software - Infrastructure Industry
- Max
- 107.77
- Q3
- 54.40
- Median
- 28.10
- Q1
- 18.03
- Min
- 5.32
MSFT’s P/E Ratio of 38.38 is within the middle range for the Software - Infrastructure industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
Forward P/E to Growth Ratio
AFRM
-6.16
Software - Infrastructure Industry
- Max
- 8.12
- Q3
- 3.94
- Median
- 2.13
- Q1
- 0.94
- Min
- 0.01
AFRM has a negative Forward PEG Ratio of -6.16. This typically results from negative earnings or forecasts of declining future earnings, making the ratio not meaningful for valuation.
MSFT
2.18
Software - Infrastructure Industry
- Max
- 8.12
- Q3
- 3.94
- Median
- 2.13
- Q1
- 0.94
- Min
- 0.01
MSFT’s Forward PEG Ratio of 2.18 is within the middle range of its peers in the Software - Infrastructure industry. This suggests a reasonable balance between the stock’s price and its expected growth, aligning with sector valuation norms.
Price-to-Sales Ratio
AFRM
7.42
Software - Infrastructure Industry
- Max
- 18.25
- Q3
- 9.05
- Median
- 4.77
- Q1
- 2.30
- Min
- 0.11
AFRM’s P/S Ratio of 7.42 aligns with the market consensus for the Software - Infrastructure industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
MSFT
13.73
Software - Infrastructure Industry
- Max
- 18.25
- Q3
- 9.05
- Median
- 4.77
- Q1
- 2.30
- Min
- 0.11
MSFT’s P/S Ratio of 13.73 is in the upper echelon for the Software - Infrastructure industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
Price-to-Book Ratio
AFRM
7.80
Software - Infrastructure Industry
- Max
- 19.94
- Q3
- 10.91
- Median
- 6.33
- Q1
- 2.95
- Min
- 0.51
The P/B Ratio is often not a primary valuation metric for the Software - Infrastructure industry.
MSFT
11.52
Software - Infrastructure Industry
- Max
- 19.94
- Q3
- 10.91
- Median
- 6.33
- Q1
- 2.95
- Min
- 0.51
The P/B Ratio is often not a primary valuation metric for the Software - Infrastructure industry.
Valuation at a Glance
| Symbol | AFRM | MSFT |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | -360.51 | 38.38 |
| Forward PEG Ratio (TTM) | -6.16 | 2.18 |
| Price-to-Sales Ratio (P/S, TTM) | 7.42 | 13.73 |
| Price-to-Book Ratio (P/B, TTM) | 7.80 | 11.52 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 36.63 | 53.45 |
| EV-to-EBITDA (TTM) | 93.06 | 24.92 |
| EV-to-Sales (TTM) | 9.41 | 13.85 |