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.
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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
Andrei Sota
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