Microsoft Corporation (NASDAQ:MSFT): An Opportunity for Fundamental Investors?


Microsoft Corporation (NASDAQ:MSFT) shares traded higher over the last trading session, losing -1.25% on 01/03/20. The shares fell to a low of $158.06 before closing at $158.62. Intraday shares traded counted 20.76 million, which was 5.01% higher than its 30-day average trading volume of 21.86M. MSFT’s previous close was $160.62 while the outstanding shares total $7.73B. The firm has a beta of 1.17, a 12-month trailing P/E ratio of 31.76, and a growth ratio of 2.19. The stock’s Relative Strength Index (RSI) is 66.42, with weekly volatility at 1.17% and ATR at 1.74. The MSFT stock’s 52-week price range has touched low of $97.20 and a $160.73 high.

Investors have identified the tech company Microsoft Corporation as an interesting stock but before investments are made there, an in-depth look at its trading activities will have to be conducted. The share is trading with a market value of around $1225.34 billion, the company now has both obstacles and catalysts that affect them and they came from their mode of operations. With the company affected by events currently, it is a perfect time to analyze the numbers behind the firm in order to come up with a rather realistic picture of what this stock is.

Microsoft Corporation (MSFT) Fundamentals that are to be considered.

When analyzing a stock, the first fundamental thing to take into account is the balance sheet. How healthy the balance sheet of a company is will determine if the company will be able to carry out all its financial and non-financial obligations and also keep the faith of its investors. For MSFT, the company has in raw cash 13.12 billion on their books with 3.02 billion currently as liabilities. How the trend is over time is what investors should be concerned about. The company has a healthy balance sheet as their debt profile has been on a decline. In terms of their assets, the company currently has 165.9 billion million total, with 58.12 billion as their total liabilities.

Potential earnings growth for Microsoft Corporation (MSFT)

In order to determine the future investment potential for this stock, we will have to analyze key trends that affect it. During the third quarter of the year, Microsoft Corporation recorded a total of 33.05 billion in revenue. This figure implies that they witnessed a quarterly year/year change in their earnings with 12.01% coming in sequential stages and their sales for the third quarter reducing by -2.0%.

What matters though is how it ends. When the core data for the company is broken down, then the stock sounds interesting. The company spent 10.41 billion trying to sell their products during the last quarter, with the result yielding a gross income of 22.65 billion. This allows shareholders to hold on to 7.73B with the revenue now reading 1.40 cents per share. This is a figure that is close to analyst’s prediction for their fourth quarter (1.25 cents a share).

Having a look at the company’s valuation, the company is expected to record 4.75 total earnings per share during the next fiscal year. It is very important though to remember that the importance of trend far outweighs that of outlook. This analysis has been great and getting further updates on MSFT sounds very interesting.

Is the stock of MSFT attractive?

In related news, EVP, Business Development, Johnson Margaret L sold 35,000 shares of the company’s stock in a transaction that recorded on Dec 05. The sale was performed at an average price of 150.01, for a total value of 5,250,462. As the sale deal closes, the EVP, Chief Marketing Officer, Capossela Christopher C now sold 7,500 shares of the company’s stock, valued at 1,085,738. Also, EVP, Chief Marketing Officer, Capossela Christopher C sold 2,500 shares of the company’s stock in a deal that was recorded on Nov 06. The shares were price at an average price of 144.01 per share, with a total market value of 360,033. Following this completion of acquisition, the EVP, Chief Marketing Officer, Capossela Christopher C now holds 2,500 shares of the company’s stock, valued at 361,875. In the last 6 months, insiders have changed their ownership in shares of company stock by 0.10%.

28 out of 34 analysts covering the stock have rated it a Buy, while 3 have maintained a Hold recommendation on Microsoft Corporation. 0 analysts has assigned a Sell rating on the MSFT stock. The 12-month mean consensus price target for the company’s shares has been set at $164.19.



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