MSFT Stock Report
Following yesterday’s Q1 Earnings Report, we ran Microsoft’s latest results through our DCF Model Projector (a feature of PRO memberships). Here’s what we found:
Revenue
Revenues of 50.1B came in at the lower bound of our projection for the quarter, marking a 10.61% increase YoY. We have projected revenues accordingly for the next 7 quarters.
Gross Margin
Gross profit margin came in at 68%, at the middle of our projection. We are working with the assumption this metric will steadily decline in the following quarters, following the trend set in the past.
Operating Expenses
The company has accelerated Operating Expenses to the high range of our projection. We have modeled the following 7 quarters accordingly.
Valuation
Our assumption is that MSFT’s valuation will decrease, according to the recent trend. The low end of the implied trend gets us to 8.86 EV / Sales.
We will work with this number in order to compute the price target.
Conclusion
Our system outputs a price target of $285, using the provided assumptions. Due to declining revenue growth and overall headwinds cited on the call, we are assigning a HOLD rating.
You can find a table of all published stock reports and ratings here. You can also request a similar stock report for any ticker, using the same page.
MSFT - Microsoft Corporation