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Microsoft Corporation (MSFT)

3.02T
245.12B
Net Income (ttm) 88.14B
Shares Out 7.43B
EPS (ttm) 11.80
PE Ratio 34.41
Forward PE 30.80
$3.00 (0.74%)
Ex-Dividend Date Aug 15, 2024
Volume 17,012,346
Open 404.03
Previous Close 402.69
Day's Range 402.26 - 408.05
52-Week Range 309.45 - 468.35
Beta n/a
Analysts Strong Buy
Price Target 492.38 (+21.27%)
Earnings Date Jul 30, 2024

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications... [Read more]

Financial Performance

In 2024, Microsoft's revenue was $245.12 billion, an increase of 15.67% compared to the previous year's $211.92 billion. Earnings were $88.14 billion, an increase of 21.80%.

Analyst Forecast

According to 35 analysts, the average rating for MSFT stock is "Strong Buy." The 12-month stock price forecast is $492.38, which is an increase of 21.27% from the latest price.

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microsoft stock research report

The rise of OpenAI and Microsoft's $13 billion bet on the AI startup

Since its was founded in 2015, OpenAI has emerged as one of the most influential AI companies, with major enterprise customers and billions in revenue.

microsoft stock research report

Investors Eligible To Participate In Microsoft Corporation Fraud Investigation With The Schall Law Firm

LOS ANGELES, CA / ACCESSWIRE / August 9, 2024 / The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Microsoft Corpor...

Microsoft has biggest opportunity take advantage of AI monetarily, says David Harden

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Microsoft (MSFT) Azure and Generative A.I. Growth "Pretty Astounding"

According to @Morningstar's Dan Romanoff, "things have been a rollercoaster for software in general," but there are bright spots investors can rely on. He talks about the outlook for cloud revenue gro...

Microsoft vs. Tesla: Which should you buy after sell-off?

The so-called Magnificent Seven - Amazon (AMZN), Apple (AAPL), Alphabet (GOOG, GOOGL), Nvidia (NVDA), Meta (META), Microsoft (MSFT), and Tesla (TSLA) - have had Wall Street's attention for some time a...

microsoft stock research report

MSFT Investors Eligible To Join Microsoft Corporation Fraud Investigation With The Schall Law Firm

LOS ANGELES, CA / ACCESSWIRE / August 8, 2024 / The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Microsoft Corpor...

microsoft stock research report

Palantir and Microsoft Join Forces on AI for Some Government Cloud Networks

“Palantir will also be an early adopter of Azure's OpenAI Service in Microsoft's Secret and Top Secret environments,” the companies said.

microsoft stock research report

Palantir jumps on Microsoft partnership to sell AI to U.S. defense, intel agencies

Palantir shares were up about 6% on Thursday morning after the company announced a partnership with Microsoft. The companies will sell secure cloud, analytics and artificial intelligence capabilities ...

microsoft stock research report

Why Google, Microsoft and Amazon Shy Away From Buying A.I. Start-Ups

Google, Microsoft and Amazon have made deals with A.I. start-ups for their technology and top employees, but have shied from owning the firms.

microsoft stock research report

Davinci Becomes DeepIP and Announces the General Availability of its First Patent AI Copilot Fully Integrated with Microsoft Word

NEW YORK--(BUSINESS WIRE)-- #DeepIP--Launching today, DeepIP is the first next-generation AI-based patent assistant, embedded in MS Word and listed as an app on the Microsoft Marketplace.

microsoft stock research report

Palantir to deploy AI products on Microsoft Azure for U.S. government agencies

Palantir Technologies said on Thursday it will offer its products, including the Artificial Intelligence Platform (AIP) on Microsoft's cloud platforms, which cater to the U.S. government and federal a...

microsoft stock research report

Palantir and Microsoft Partner to Deliver Enhanced Analytics and AI Services to Classified Networks for Critical National Security Operations

DENVER--(BUSINESS WIRE)--Palantir Technologies Inc. (NYSE: PLTR) and Microsoft Corporation (NASDAQ: MSFT) announce today a significant advancement in their partnership to bring some of the most sophis...

microsoft stock research report

Microsoft, CrowdStrike, Delta: Who's really to blame?

A ton of narratives are circulating about what happened to Delta Air Lines the days following CrowdStrike's global tech outage. Take a look at what each company is saying.

microsoft stock research report

Analysts' Top S&P 500 Stocks to Buy Now

UnitedHealth, Emerson Electric and Microsoft top the list of stocks scoring rare Strong Buy consensus ratings. Some of the other names might surprise you.

Microsoft pushes back against Delta's claims of liability in massive IT outage

CNBC's Steve Kovach reports on the massive IT outage that affected several industries.

microsoft stock research report

Neon to Bring Serverless Postgres to Azure, Announces $25 Million Strategic Investment led by M12, Microsoft's Venture Fund

Neon, the serverless Postgres database built for developers, today announces a $25.6 Million strategic investment led by M12, Microsoft's Venture Fund.

microsoft stock research report

Redpanda Expands Multi-Cloud Offerings with Microsoft Azure Integration

SAN FRANCISCO--(BUSINESS WIRE)--Redpanda, the unified streaming data platform, today announced the integration of its Bring Your Own Cloud (BYOC) service with Microsoft Azure, expanding its multi-clou...

microsoft stock research report

Google's antitrust ruling has experts looking to 25-year-old Microsoft case for answers

A U.S. judge ruled Monday that Google holds a monopoly in the search market, and invoked the case of Microsoft from over two decades ago. "All along, the government has implicitly and explicitly said ...

microsoft stock research report

Microsoft Joins CrowdStrike in Pushing Back at Delta Over Tech Outage Claims

Delta has said the July IT outage cost it $500 million.

microsoft stock research report

Microsoft hits back at Delta after the airline said last month's tech outage cost it $500 million

Microsoft is joining cybersecurity software firm CrowdStrike in fighting back against Delta Air Lines, which blames the companies for causing several thousand canceled flights following a technology o...

microsoft stock research report

Microsoft fires back at Delta after airline blames it for costly tech outage

microsoft stock research report

Microsoft Joins CrowdStrike in Criticizing Delta's Response to Outage

Delta Airlines' (DAL) response to last month's global tech outage came under fire from Microsoft (MSFT) on Tuesday as the tech giant joined CrowdStrike (CRWD) in criticizing the airline's handling of ...

microsoft stock research report

Microsoft Corporation Investors Can Participate In Fraud Investigation With The Schall Law Firm

LOS ANGELES, CA / ACCESSWIRE / August 6, 2024 / The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Microsoft Corpor...

microsoft stock research report

Microsoft blames Delta Airlines for failing to recover quickly after global outage — here's why

The tech giant said its CEO Satya Nadella emailed Delta's CEO, but never got a reply.

microsoft stock research report

3 Stocks Ride A $100 Billion AI Data Center Wave

Despite global market turbulence and growing fears of a U.S. economic slowdown, major tech companies are ramping up their investments in data centers to support the booming artificial intelligence (AI...

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Microsoft Corp MSFT

Company report, microsoft earnings: strap in. azure growth is set to accelerate in the second half of fiscal 2025.

We raise our fair value estimate for wide-moat Microsoft to $490 per share, from $435 after the company delivered another good quarter overall, even if it was in line with our expectations on headline numbers. In an earnings call packed with new data points around artificial intelligence-related demand, which were impressive, in our view, the single most important item was guidance that calls for Azure revenue to accelerate in the second half of the year as the current surging investment in data center capacity comes online. Therefore, we raised our revenue growth estimates for the medium term, and we also tweaked our profitability assumptions higher based on consistently good performance and a solid outlook. Revenue was again governed by data center capacity constraints and several pockets of slight weakness arising in Europe. With shares down slightly afterhours following a recent pullback, we see the stock as attractive.

Price vs Fair Value

Bulls say, bears say.

Public cloud is widely considered to be the future of enterprise computing, and Azure is a leading service that benefits the evolution to first to hybrid environments, and then ultimately to public cloud environments.
Momentum is slowing in the ongoing shift to subscriptions, particularly in Office, which is generally considered a mature product.

Palantir stock climbs on AI partnership with Microsoft

Palantir and microsoft partner to deliver enhanced analytics and ai services to classified networks for critical national security operations, msft investors have opportunity to join microsoft corporation fraud investigation with the schall law firm, shareholder alert: pomerantz law firm investigates claims on behalf of investors of microsoft corporation - msft, amazon's stock flashes this downtrend warning for the first time in over a year, microsoft corporation (msft) investigation: bronstein, gewirtz & grossman, llc encourages investors to seek compensation for alleged wrongdoings, london stock exchange nears microsoft roll out after landmark tie-up — financial news, trading information, key statistics, company profile, competitors.

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Financial Strength

34.3823.3123.71
11.246.7141.80
12.376.277.04
25.9817.0219.46

Profitability

1.061.900.59
1.272.080.72
36.65281.774.21

Software - Infrastructure Industry Comparables

18.96%26.65%11.49%
37.13%37.68%363.05%
28.06%33.14%19.73%

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microsoft stock research report

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Microsoft corporation (msft), 458,462.06%.

PrmRrpdzk$363.9 Bil
QsglmwrjMtp$237.8 Bil
VwdkhysvpCtjd$107.3 Bil
VjvxfyxkVdjdbc$80.4 Bil
GwzbtclxGtcphyh$67.2 Bil
VxmjjnxkdVcmvvw$58.6 Bil
NmjndylbXqgh$53.3 Bil
FshcfdxrPbzzyg$38.3 Bil
FqmdtrgmzKpzccl$26.6 Bil
  • Previous Close 402.69
  • Open 404.00
  • Bid 405.95 x 100
  • Ask 406.22 x 100
  • Day's Range 402.26 - 408.02
  • 52 Week Range 309.45 - 468.35
  • Volume 19,276,666
  • Avg. Volume 20,101,046
  • Market Cap (intraday) 3.018T
  • Beta (5Y Monthly) 0.89
  • PE Ratio (TTM) 34.35
  • EPS (TTM) 11.82
  • Earnings Date Oct 22, 2024 - Oct 28, 2024
  • Forward Dividend & Yield 3.00 (0.74%)
  • Ex-Dividend Date Aug 15, 2024
  • 1y Target Est 497.69

Microsoft Corporation Overview Software - Infrastructure / Technology

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.

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Microsoft FY24 Q4 Earnings

Microsoft FY24 Q4 Earnings

July 30, 2024

Leading in the era of AI: How Microsoft’s platform differentiation and Copilot empowerment are driving AI Transformation

Looking back on FY24:

from Copilots empowering human achievement to leading AI Transformation

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Last PriceToday's ChangeToday's Volume
$406.02+3.33 (0.83%)19,276,666
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Quote Details Chart

Today's Open$404.03
Previous Close$402.69
Day's Range$402.26 - $408.05
52 Week range$309.45 - $468.35
Beta0.90
Avg. Volume 27,622,545
Put/Call Ratio 0.7
Put/Call Ratio 0.7
Quarterly Div. $0.75 (0.74%)
Next Ex-DateAug 15, 2024
Next Pay DateSep 12, 2024
Market Capitalization $3.0T
Shares Outstanding7.433B
Shares Held By Institutions71%
  • UPDATE 3-Delta rejects CrowdStrike criticism, sees $500 mln hit from cyber outage
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  • LargeCap Big Tech Stocks Report Earnings Today: Discover SmallCap Stocks Inside to Watch Now!
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Microsoft stock surpassed the consensus in q4, what’s next.

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A signage of Microsoft is being seen outside its office building in Gurugram, in the outskirts of ... [+] New Delhi, India, on July 19, 2024. (Photo by Kabir Jhangiani/NurPhoto via Getty Images)

Microsoft’s stock (NASDAQ: MSFT) has gained approximately 12% YTD as compared to the 14% rise in the S&P500 index over the same period. Notably, Microsoft’s peer Amazon (NASDAQ: AMZN) is up 20% YTD. Overall, at its current price of $423 per share, MSFT is trading 15% below its fair value of $498 – Trefis’ estimate for Microsoft’s valuation .

Amid the current financial backdrop, MSFT stock has seen extremely strong gains of 100% from levels of $215 in early January 2021 to around $425 now, vs. an increase of about 45% for the S&P 500 over this roughly 3-year period. However, the increase in MSFT stock has been far from consistent. Returns for the stock were 52% in 2021, -28% in 2022, and 58% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 - indicating that MSFT underperformed the S&P in 2022. In fact, consistently beating the S&P 500 - in good times and bad - has been difficult over recent years for individual stocks; for other heavyweights in the Information Technology sector including AAPL, NVDA, and ORCL, and even for the megacap stars GOOG, TSLA, and AMZN. In contrast, the Trefis High Quality Portfolio , with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics . Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could MSFT face a similar situation as it did in 2022 and underperform the S&P over the next 12 months - or will it see a strong jump?

The technology giant surpassed the consensus in the fourth quarter of FY2024 (FY July-June). It posted total revenues of $64.73 billion – up 15% y-o-y, driven by an 11% rise in productivity & business processes unit, a 19% gain in the intelligent cloud, and a 14% increase in the more personal computing business. While the productivity & business processes benefited from growth in Office 365 commercial, LinkedIn, and dynamic products categories, the intelligent cloud segment was up due to a 29% jump in Azure and other cloud services revenues. Notably, the improvement in Azure and other cloud service revenues was still below the street estimates. Overall, the net income rose by 10% y-o-y to $22 billion.

The company’s revenues increased 16% y-o-y to $245.1 billion in FY 2024. While all the segments reported positive growth, the intelligent cloud was up due to Azure, productivity and business processes benefited from Office 365 commercial, and more personal computing revenue was driven by gaming. Further, the operating income grew 24% y-o-y in the year, leading to a 22% improvement in the net income to $88.13 billion.

Moving forward, we expect the same trend to continue in the first quarter. Overall, Microsoft revenues are estimated to touch $280 billion in FY2025. Additionally, MSFT’s net income margin is likely to remain around the same level as last year, leading to a net income of $98.6 billion and an annual GAAP EPS of $13.28. This coupled with a P/E multiple of just above 37x will lead to a valuation of $498.

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Microsoft (MSFT)

(delayed data from nsdq).

$406.02 USD

+3.33 (0.83%)

Updated Aug 9, 2024 04:00 PM ET

After-Market: $406.35 +0.33 (0.08%) 7:58 PM ET

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This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.

Zacks Rank Definition Annualized Return
1Strong Buy24.03%
2Buy17.70%
3Hold9.37%
4Sell5.03%
5Strong Sell2.48%
S&P50011.19%

Zacks Rank Education - Learn about the Zacks Rank

Zacks Rank Home - Zacks Rank resources in one place

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3-Hold of 5     3    

The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.

The scores are based on the trading styles of Value, Growth, and Momentum. There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score.

Value Score A
Growth Score A
Momentum Score A
VGM Score A

Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.

As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.

Zacks Style Scores Education - Learn more about the Zacks Style Scores

D  Value | B  Growth | D  Momentum | D  VGM

The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.

An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.

The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%.

Zacks Rank Education -- Learn more about the Zacks Rank Zacks Industry Rank Education -- Learn more about the Zacks Industry Rank

Bottom 43% (142 out of 250)

Industry: Computer - Software

Zacks Premium Feature

Style Scorecard

The Zacks Equity Research reports , or ZER for short, are our in-house, independently produced research reports.

The ever popular one-page Snapshot reports are generated for virtually every single Zacks Ranked stock. It's packed with all of the company's key stats and salient decision making information. Including the Zacks Rank, Zacks Industry Rank, Style Scores, the Price, Consensus & Surprise chart, graphical estimate analysis and how a stocks stacks up to its peers.

The detailed multi-page Analyst report does an even deeper dive on the company's vital statistics. In addition to all of the proprietary analysis in the Snapshot, the report also visually displays the four components of the Zacks Rank (Agreement, Magnitude, Upside and Surprise); provides a comprehensive overview of the company business drivers, complete with earnings and sales charts; a recap of their last earnings report; and a bulleted list of reasons to buy or sell the stock. It also includes an industry comparison table to see how your stock compares to its expanded industry, and the S&P 500.

Researching stocks has never been so easy or insightful as with the ZER Analyst and Snapshot reports.

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Value Scorecard More Info

The Value Scorecard identifies the stocks most likely to outperform based on its valuation metrics. This list of both classic and unconventional valuation items helps separate which stocks are overvalued, rightly lowly valued, and temporarily undervalued which are poised to move higher.

The respective items are ranked and graded into five groups: A, B, C, D and F. An A is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.

Value Score A

As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B.

The Value Scorecard table also displays the values for its respective Industry along with the values and Value Score of its three closest peers.

Value Style - Learn more about the Value Style

Growth Scorecard More Info

The Growth Scorecard evaluates sales and earnings growth along with other important growth measures. This includes measuring aspects of the Income Statement, Statement of Cash Flows, the Balance Sheet, and more. Some of the items you'll see in this category might look very familiar, while other items might be quite new to some. But they all have their place in the Growth style.

Growth Score A

The Growth Scorecard table also displays the values for its respective Industry along with the values and Growth Score of its three closest peers.

Growth Style - Learn more about the Growth Style

Momentum Scorecard More Info

The Momentum Scorecard focuses on price and earnings momentum and indicates when the timing is right to enter a stock. The analyzed items go beyond simple trend analysis. The tested combination of price performance, and earnings momentum (both actual and estimate revisions), creates a powerful timeliness indicator to help you identify stocks on the move so you know when to get in and when to get out.

Momentum Score A

The Momentum Scorecard table also displays the values for its respective Industry along with the values and Momentum Score of its three closest peers.

Momentum Style - Learn more about the Momentum Style

Value Score MSFT: D Industry [X] More Info (aka ) is a subset of the M (Medium Sized) Industry, which is a subset of the larger Sector category, which is used to classify all of the stocks in the Zacks Universe. The Zacks database contains over 10,000 stocks. All of those stocks are classified into three groups: Sector, M Industry and X Industry. There are 17 Sectors, 60 different M Industries, and 265 X Industries.

For example, a regional bank would be classified in the Finance Sector. Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts. And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks.

The X Industry values displayed in this column are the median values for all of the stocks within their respective industry. When evaluating a stock, it can be useful to compare it to its industry as a point of reference. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal.

: D : D : C
Zacks Rank More Info
Zacks Rank Definition Annualized Return
1 Strong Buy 24.03%
2 Buy 17.70%
3 Hold 9.37%
4 Sell 5.03%
5 Strong Sell 2.48%
S&P 500 11.19%

Zacks Premium - The way to access to the Zacks Rank

The VGM Score are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.

The VGM score is based on the trading styles of Growth, VAlue, and Momentum.

Within the VGM Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.

As an investor, you want to buy srocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.

Zacks Style Scores Education - Learn more about the Zacks Style Scores.

The Cash/Price ratio is calculated as cash and marketable securities per share divided by the stock price. This is also referred to as the cash yield.

Like the earnings yield, which shows the anticipated yield (or return) on a stock based on the earnings and the price paid, the cash yield does the same, but with cash being the numerator instead of earnings. For example, a cash/price ratio, or cash yield, of .08 suggests an 8% return or 8 cents for every $1 of investment.

Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization is a valuation metric used to measure a company's value and is helpful in comparing one stock to another.

Enterprise Value (EV) is Market Capitalization + Debt - Cash. Many investors prefer EV to just Market Cap as a better way to determine the value of a company. EBITDA, as the acronym depicts, is earnings before interest, taxes, depreciation and amortization. That means these items are added back into the net income to produce this earnings number. Since there is a fair amount of discretion in what's included and not included in the 'ITDA' portion of this calculation, it is considered a non-GAAP metric. The EV/EBITDA ratio is a valuation multiple and is often used in addition, or as an alternative, to the P/E ratio. And like the P/E ratio, a lower number is typically considered 'better' than a higher number.

The PEG ratio is the P/E ratio divided by its long-term growth rate consensus. This ratio essentially compares the P/E to its growth rate, thus, for many, telling a more complete story than just the P/E ratio alone.

Conventional wisdom says that a PEG ratio of 1 or less is considered good (at par or undervalued to its growth rate). A value greater than 1, in general, is not as good (overvalued to its growth rate). For example, a company with a P/E ratio of 25 and a growth rate of 20% would have a PEG ratio of 1.25 (25 / 20 = 1.25). A company with a P/E ratio of 40 and a growth rate of 50% would have a PEG ratio of 0.80 (40 / 50 = 0.80). Traditionally, investors would look at the stock with the lower P/E and deem it a bargain. But when compared to its growth rate, it does't have the earnings growth to justify its P/E. In this example, the one with the P/E of 40 is the better bargain because it is selling at a discount to its growth rate. So the PEG ratio tells you what you're paying for each unit of earnings growth.

The Price to Book ratio or P/B is calculated as market capitalization divided by its book value. (Book value is defined as total assets minus liabilities, preferred stocks, and intangible assets.) In short, this is how much a company is worth. Investors use this metric to determine how a company's stock price stacks up to its intrinsic value.

A P/B of 1 means it's selling at its per share book value. A P/B of 2 means it's selling at 2 times its book value. A P/B of 0.5 means its selling at half its book value. Note; companies will typically sell for more than their book value in much the same way that a company will sell at a multiple of its earnings. The median P/B ratio for stocks in the S&P is just over 3. While a P/B of less than 3 would mean it's trading at a discount to the market, different industries have different median P/B values. So, as with other valuation metrics, it's a good idea to compare it to its relevant industry.

The Price to Cash Flow ratio or P/CF is price divided by its cash flow per share. It's another great way to determine whether a company is undervalued or overvalued with the denominator being cash flow.

One of the reasons why some investors prefer the P/CF ratio over the P/E ratio is because the net income of the cash flow portion rightly adds depreciation and amortization back in since these are not cash expenditures. In contrast, the net income that goes into the earnings portion of the P/E ratio does not add these in, thus artificially reducing the income and skewing the P/E ratio. Like the P/E ratio, a lower number is considered better. A value under 20 is generally considered good. Our testing substantiates this with the optimum range for price performance between 0-20.

The Price to Earnings ratio or P/E is price divided by earnings. It is the most commonly used metric for determining a company's value relative to its earnings. In this example, we are using the consensus earnings estimate for the Current Fiscal Year (F1) .

A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings. In general, a lower number or multiple is usually considered better that a higher one. Value investors will typically look for stocks with P/E ratios under 20, while growth investors and momentum investors are often willing to pay much more. Aside from using absolute numbers, however, you can also find value by comparing the P/E ratio to its relevant industry and its peers.

The Price to Sales ratio or P/S is calculated as price divided by sales. After the P/E ratio, it's one of the most common valuation metrics.

If the P/S ratio is 1, that means you're paying $1 for every $1 of sales the company makes. A P/S ratio of 2 means you're paying $2 for every $1 of sales the company makes. In general, the lower the ratio is the better. For example, a P/S ratio of 0.5 means you're paying 50 cents for every $1 of sales the company makes. One of the reasons some investors prefer the P/S ratio over other metrics like the P/E ratio is because sales are harder to manipulate on an income statement than earnings. While our testing has found that a P/S ratio of <2 is the optimum range for returns, be sure to compare this ratio to its respective industry.

The Earnings Yield (also known as the E/P ratio) measures the anticipated yield (or return) an investment in a stock could give you based on the earnings and the price paid. It is essentially the inverse of the P/E ratio. It's calculated as earnings divided by price.

For example, a stock trading at $35 with earnings of $3 would have an earnings yield of 0.0857 or 8.57%. A yield of 8.57% also means 8.57 cents of earnings for $1 of investment. The most common way this ratio is used is to compare it to other stocks and to compare it to the 10 Year T-Bill. Conventional wisdom also has it that if the yield on the stock market (S&P 500 for example) is lower that the yield on the 10 Yr., then stocks would be considered overvalued. Conversely, if the yield on stocks is higher than the 10 Yr., then stocks would be considered undervalued. Since bonds and stocks compete for investors' dollars, a higher yield typically needs to be paid to the stock investor for the extra risk being assumed vs. the virtual risk-free investment offered in U.S.-backed Treasuries.

Debt to Equity (or D/E ratio) is total liabilities divided by total shareholder equity. It is used to help gauge a company's financial health.

A higher number means the company has more debt to equity, whereas a lower number means it has less debt to equity. A D/E ratio of 1 means its debt is equivalent to its common equity. When comparing this ratio to different stocks in different industries, take note that some businesses are more capital intensive than others. A D/E ratio of 2 might be par for the course in one industry, while 0.50 would be considered normal for another. So it's a good idea to compare a stock's debt to equity ratio to its industry to see how it stacks up to its peers first.

Cash Flow per share ($/share) calculates the amount of incoming cash vs. the amount of outgoing cash for a company. Cash flow can be found on the cash flow statement. It's then divided by the number of shares outstanding to determine how much cash is generated per share. It's used by investors as a measure of financial health.

Cash is vital to a company in order to finance operations, invest in the business, pay expenses, etc. Since cash can't be manipulated like earnings can, it's a preferred metric for analysts. Using this item along with the 'Current Cash Flow Growth Rate' (in the Growth category above), and the 'Price to Cash Flow ratio' (several items above in this same Value category), will give you a well-rounded indication of the amount of cash they are generating, the rate of their cash flow growth, and the stock price relative to its cash flow.

Growth Score MSFT: B Industry [X] More Info (aka ) is a subset of the M (Medium Sized) Industry, which is a subset of the larger Sector category, which is used to classify all of the stocks in the Zacks Universe. The Zacks database contains over 10,000 stocks. All of those stocks are classified into three groups: Sector, M Industry and X Industry. There are 17 Sectors, 60 different M Industries, and 265 X Industries.

For example, a regional bank would be classified in the Finance Sector. Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts. And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks.

The X Industry values displayed in this column are the median values for all of the stocks within their respective industry. When evaluating a stock, it can be useful to compare it to its industry as a point of reference. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal.

: C : A : B
Zacks Rank More Info
Zacks Rank Definition Annualized Return
1 Strong Buy 24.03%
2 Buy 17.70%
3 Hold 9.37%
4 Sell 5.03%
5 Strong Sell 2.48%
S&P 500 11.19%

Historical EPS Growth Rate looks at the average annual (trailing 12 months) EPS growth rate over the last 3-5 years of actual earnings.

This longer-term historical perspective lets the user see how a company has grown over time. Note: there are many factors that can influence the longer-term number, not the least of which is the overall state of the economy (recession will reduce this number for example, while a recovery will inflate it), which can skew comparisons when looking out over shorter time frames. The longer-term perspective helps smooth out short-term events.

Projected EPS Growth looks at the estimated growth rate for one year. It takes the consensus estimate for the current fiscal year (F1) divided by the EPS for the last completed fiscal year (F0) (actual if reported, the consensus if not).

Growth traders and investors will tend to look for growth rates of 20% or higher. That does not mean that all companies with large growth rates will have a favorable Growth Score. Many other growth items are considered as well. But, typically, an aggressive growth trader will be interested in the higher growth rates.

Current Cash Flow Growth measures the percent change in the year over year Cash Flow. Cash Flow is net income plus depreciation and other non-cash charges. A strong cash flow is important for covering interest payments, particularly for highly leveraged companies.

Cash Flow is a measurement of a company's health. It's typically categorized as a valuation metric and is most often quoted as Cash Flow per Share and as a Price to Cash flow ratio. In this case, it's the cash flow growth that's being looked at. A positive change in the cash flow is desired and shows that more 'cash' is coming in than 'cash' going out.

The Historical Cash Flow Growth is the longer-term (3-5 year annualized) growth rate of the cash flow change. Once again, cash flow is net income plus depreciation and other non-cash charges.

Cash flow itself is an important item on the income statement. While the one year change shows the current conditions, the longer look-back period shows how this metric has changed over time and helps put the current reading into proper perspective. Also, by looking at the rate of this item, rather than the actual dollar value, it makes for easier comparisons across the industry and peers.

The Current Ratio is defined as current assets divided by current liabilities. It measures a company's ability to pay short-term obligations. It's also commonly referred to as a 'liquidity ratio'.

A ratio of 1 means a company's assets are equal to its liabilities. Less than 1 means its liabilities exceed its short-term assets (cash, inventory, receivables, etc.). Above 1 means it assets are greater than its liabilities. A ratio of 2 means its assets are twice that of its liabilities. A higher number is better than a lower number. A 'good' number would usually fall within the range of 1.5 to 3. Like most ratios, this number will vary from industry to industry.

Debt to Capital (or D/C ratio) is the fraction of debt (including mortgages and long-term leases) to long-term capitalization.

This measure is expressed as a percentage. A higher number means the more debt a company has compared to its capital structure. Investors like this metric as it shows how a company finances its operations, i.e., what percentage is financed thru shareholder equity or debt. A ratio under 40% is generally considered to be good.But note; this ratio can vary widely from industry to industry. So be sure to compare it to its group when comparing stocks in different industries.

Net Margin is defined as net income divided by sales. This shows the percentage of profit a company earns on its sales.

If a company's net margin is 15%, for example, that means its net income (or profit) is 15 cents for every $1 of sales the company makes. A change in margin can reflect either a change in business conditions, or a company's cost controls, or both. If a company's expenses are growing faster than their sales, this will reduce their margins. But note, different industries have different margin rates that are considered good. And margin rates can vary significantly across these different groups. So, when comparing one stock to another in a different industry, it's best make relative comparisons to that stock's respective industry values.

Return on Equity (or ROE) is calculated as income divided by average shareholder equity (past 12 months, including reinvested earnings). The income number is listed on a company's Income Statement. Shareholder Equity (which is the difference between Total Assets and Total Liabilities) can be found on the Balance Sheet.

ROE is always expressed as a percentage. A company with an ROE of 10%, for example, means it created 10 cents of assets for every $1 of shareholder equity in a given year. Seeing how a company makes use of its equity, and the return generated on it, is an important measure to look at. ROE values, like other values, can vary significantly from one industry to another.

The Sales to Assets ratio (or Sales to Total Assets or S/TA for short) shows how much sales are generated from a company's assets. As the name suggests, it's calculated as sales divided by assets. This is also commonly referred to as the Asset Utilization ratio.

A higher number is better than a lower one as it shows how effective a company is at generating revenue from its assets. A sales/assets ratio of 2.50 means the company generated $2.50 in revenue for every $1.00 of assets on its books.

The Projected Sales Growth (F1/F0) looks at the estimated growth rate for the current year. It takes the consensus sales estimate for the current fiscal year (F1) divided by the sales for the last completed fiscal year (F0) (actual if reported, the consensus if not).

While earnings are the driving metric behind stock prices, there wouldn't be any earnings to calculate if there weren't any sales to begin with. Like earnings, a higher growth rate is better than a lower growth rate. Seeing a company's projected sales growth instantly tells you what the outlook is for their products and services. As a point of reference, over the last 10 years, the median sales growth for the stocks in the S&P 500 was 14%. Of course, different industries will have different growth rates that are considered good. So be sure to compare a stock to its industry's growth rate when sizing up stocks from different groups.

Momentum Score MSFT: D Industry [X] More Info (aka ) is a subset of the M (Medium Sized) Industry, which is a subset of the larger Sector category, which is used to classify all of the stocks in the Zacks Universe. The Zacks database contains over 10,000 stocks. All of those stocks are classified into three groups: Sector, M Industry and X Industry. There are 17 Sectors, 60 different M Industries, and 265 X Industries.

For example, a regional bank would be classified in the Finance Sector. Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts. And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks.

The X Industry values displayed in this column are the median values for all of the stocks within their respective industry. When evaluating a stock, it can be useful to compare it to its industry as a point of reference. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal.

: C : C : B
Zacks Rank More Info
Zacks Rank Definition Annualized Return
1 Strong Buy 24.03%
2 Buy 17.70%
3 Hold 9.37%
4 Sell 5.03%
5 Strong Sell 2.48%
S&P 500 11.19%

The Daily Price Change displays the day's percentage price change using the most recently completed close. This item is updated at 9 pm EST each day.

While the hover-quote on Zacks.com, as well as the various tables, displays the delayed intraday quote and price change, this display shows the daily change as of the most recently completed trading day. This is useful for obvious reasons, but can also put the current day's intraday gains into better context by knowing if the recently completed trading day was up or down.

The 1 Week Price Change displays the percentage price change over the last 5 trading days using the most recently completed close to the close from 5 days before.

The 1 week price change reflects the collective buying and selling sentiment over the short-term. A strong weekly advance (especially when accompanied by increased volume) is a sought after metric for putting potential momentum stocks onto one's radar. Others will look for a pullback on the week as a good entry point, assuming the longer-term price changes (4 week, 12 weeks, etc.) are strong. The Momentum Score takes all of this and more into account.

The 4 Week Price Change displays the percentage price change for the most recently completed 4 weeks (20 trading days).

This is a medium-term price change metric. The 4 week price change is a good reference point for the individual stock and how it's performed in relation to its peers.

The 12 Week Price Change displays the percentage price change over the most recently completed 12 weeks (60 days).

This is a medium-term price change metric (like the 4 week price change). With 12 weeks representing a meaningful part of a year, this time period will show whether a stock has been enjoying strong investor demand, or if it's in consolidation, or distress.

The 52 Week Price Change displays the percentage price change over the most recently completed 52 weeks (260 trading days).

This is a longer-term price change metric. The 52 week price change is a good reference point. Some investors seek out stocks with the best percentage price change over the last 52 weeks, expecting that momentum to continue. Others look for those that have lagged the market, believing those are the ones ripe for the biggest increases to come. Regardless of the many ways investors use this item, whether looking at a stock's price change, an index's return, or a portfolio manager's performance, this time-frame is a common judging metric in the financial industry.

The 20 Day Average Volume is the average daily trading volume over the last 20 trading days.

Volume is a useful item in many ways. For one, part of trading is being able to get in and out of a stock easily. If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. This is also useful to know when comparing a stock's daily volume (which can be found on a ticker's hover-quote) to that of its average volume. A rising stock on above average volume is typically a bullish sign whereas a declining stock on above average volume is typically bearish. As they say, 'price follows volume'. The 20 day average establishes this baseline.

The (F1) EPS Estimate Weekly Change calculates the percentage change in the consensus earnings estimate for the current year (F1) over the last week.

Earnings estimate revisions are the most important factor influencing stocks prices. It's an integral part of the Zacks Rank and a critical part in effective stock evaluation. If a stock's EPS consensus estimate is $1.10 now vs. $1.00 the week before, that will be reflected as a 10% change. If, on the other hand, it went from $1.00 to 90 cents, that would be a -10% change in the consensus estimate revision.

The (F1) EPS Estimate Monthly Change calculates the percentage change in the consensus earnings estimate for the current year (F1) over the last 4 weeks.

Seeing a stock's EPS change over 1 week is important. But, it's made even more meaningful when looking at the longer-term 4 week percent change. And, of course, the 4 week change helps put the 1 week change into context.

The (F1) EPS Estimate Quarterly Change calculates the percentage change in the consensus earnings estimate for the current year (F1) over the last 12 weeks.

This time period essentially shows you how the consensus estimate has changed from the time of their last earnings report. Ideally, an investor would like to see a positive EPS change percentage in all periods, i.e., 1 week, 4 weeks, and 12 weeks.

The (Q1) EPS Estimate Monthly Change calculates the percentage change in the consensus earnings estimate for the current quarter (Q1) over the last 4 weeks.

While the F1 consensus estimate and revision is a key driver of stock prices, the Q1 consensus is an important item as well, especially over the short-term, and particularly as a stock approaches its earnings date. If a stock's Q1 estimate revision decreases leading up to its earnings release, that's usually a negative sign, whereas an increase is typically a positive sign. The change is made all the more important the closer proximity it is to the stock's earnings date since it is generally believed that the most recent estimates are the most accurate since it's using the most up-to-date information leading up to the report.

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microsoft stock research report

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Stock MSFT

Analyst Reco. Microsoft Corporation

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Market Closed - Nasdaq 04:00:00 2024-08-09 pm EDT 5-day change 1st Jan Change
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Announcement Date

Microsoft to Drive Future Gains From AI Investments, Morgan Stanley Says

Microsoft to Drive Future Gains From AI Investments, Morgan Stanley Says

July 31, 2024 at 01:27 pm EDT

Microsoft: Cloud drives growth, but still disappoints

Microsoft:  Cloud drives growth, but still disappoints

Microsoft and Nvidia under antitrust investigation in the United States

Microsoft and Nvidia under antitrust investigation in the United States

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Microsoft Profit Jumps 10%, but Cloud Computing Grows Less Than Expected

The tech giant’s revenue also grew 15 percent, but Wall Street is watching whether its investment in A.I. is paying off for its cloud computing business.

A person holding two laptop computers on a stage with projections of them on a screen that appears behind him, in front of a live audience cast in blue light.

By Karen Weise

Karen Weise has covered Microsoft since 2018.

Microsoft closed its first full fiscal year of aggressive artificial intelligence investment with a mixed bag of results for people worried about how much big tech companies are spending on A.I.

Sales from April through June hit $64.7 billion, up 15 percent from the same period last year, the company reported on Tuesday. Profit rose 10 percent, to $22 billion.

The results beat Wall Street’s expectations and Microsoft’s own predictions. But the company’s cloud computing business did not grow as quickly as investors had expected, leading its share price to drop more than 6 percent in after-hours trading.

Azure, Microsoft’s flagship cloud computing product that includes A.I. services, grew 30 percent in the quarter after taking into account currency fluctuations. Investors had been hoping it would grow between 30 and 31 percent, as Microsoft had told them to expect.

On a call with investors, Satya Nadella, the company’s chief executive, and Amy Hood, the finance chief, said that Microsoft could have sold more if they’d had enough data center capacity — and that those constraints would last through the end of 2024. They added that the A.I. investments are attracting new customers to Microsoft’s cloud business.

“These are generational things once they get going with you,” Mr. Nadella said.

The earnings report showed how the company is spending mightily to build the data centers and acquire the pricey chips that power A.I. technology. Microsoft’s capital expenses have grown every quarter since late 2022, when Mr. Nadella pushed his top executives to make big investments in A.I. Microsoft spent almost $19 billion on capital expenses last quarter, more than twice as much as two years earlier.

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COMMENTS

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    Microsoft Co. (NASDAQ:MSFT) announced its quarterly earnings data on Tuesday, July, 30th. The software giant reported $2.95 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.90 by $0.05. Microsoft's revenue for the quarter was up 15.2% compared to the same quarter last year.

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  26. Microsoft Stock Drops After Disappointing Cloud Growth

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  29. Microsoft Profit Jumps 10%, but Cloud Computing Grows Less Than

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