In a year in which the S&P 500 has ground sideways, stodgy, old Microsoft (MSFT) — the Big Tech company everyone used to love to hate – has quietly been hitting new 52-week highs and is up nearly 20% year to date.

Sure, that’s nothing compared to Alphabet (GOOGL), which is up by nearly half. But Microsoft stock is beating the pants off of Apple (AAPL), which is barely up 5% in 2015.

Softy is back, and CEO Satya Nadella is steering the company in the right direction with his “mobile first, cloud first” strategy. But with Microsoft shares now trading for 37 times earnings, has the stock price lost touch with reality? After all, this is a company whose iconic product — the Windows operating system — is tied to a declining PC market.

Let’s take a look.

Microsoft Stock by the Numbers

To start, while Microsoft stock’s current price-to-earnings ratio might look a little on the pricey side, that is partly due to the bath it took in its fiscal fourth quarter. Microsoft took a $7.5 billion writedown on its investment in Nokia, which depressed earnings for the quarter and for the entire year. Looking at next year’s expected earnings, Microsoft stock trades at a forward P/E ratio of 20. While that is not “cheap,” per se, it’s in line with the forward P/E of 18 for the S&P 500.

Revenue growth has been disappointing over the past two quarters (looking at a rolling-twelve-month tally), but this is in part due to Microsoft’s transition to a subscription-based model.

For example, Office users traditionally bought a licensed copy in a single one-time payment. But today, Office 365 users pay a low monthly subscription fee. The result is that current revenues appear lower even while the quality of revenues has improved, as a subscription-based model creates regular, recurring payments. Microsoft estimates that this will ultimately bring in 80% more revenue per customer, though it will take time to fully work out.