Is Microsoft Stock a Good Investment?

Microsoft Investment Advice

  MSFT
To provide specific investment advice or recommendations on Microsoft stock, we recommend investors consider the following general factors when evaluating Microsoft. This will help you to make an informed decision on whether to include Microsoft in one of your diversified portfolios:
  • Examine Microsoft's financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
  • Research Microsoft's leadership team and their track record. Good management can help Microsoft navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
  • Consider the overall health of the Systems Software space and any emerging trends that could impact Microsoft's business and its evolving consumer preferences.
  • Compare Microsoft's performance and market position to its competitors. Analyze how Microsoft is positioned in terms of product offerings, innovation, and market share.
  • Check if Microsoft pays a dividend and its dividend yield and payout ratio.
  • Review what financial analysts are saying about Microsoft's stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in Microsoft stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if Microsoft is a good investment.
 
Sell
 
Buy
Buy
Macroaxis provides trade recommendations on Microsoft to complement and cross-verify current analyst consensus on Microsoft. Our advice engine determines the firm's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon. To make sure Microsoft is not overpriced, please verify all Microsoft fundamentals, including its shares owned by institutions, cash per share, number of employees, as well as the relationship between the revenue and cash flow from operations . Given that Microsoft has a price to earning of 26.64 X, we recommend you to check Microsoft market performance and probability of bankruptcy to ensure the company can sustain itself in the current economic cycle given your last-minute risk tolerance and investing horizon.

Market Performance

ModestDetails

Volatility

Very steadyDetails

Hype Condition

StaleDetails

Current Valuation

UndervaluedDetails

Odds Of Distress

LowDetails

Economic Sensitivity

Follows the market closelyDetails

Investor Sentiment

AlarmedDetails

Analyst Consensus

Strong BuyDetails

Financial Leverage

Not RatedDetails

Reporting Quality (M-Score)

UnavailableDetails

Examine Microsoft Stock

Researching Microsoft's stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 74.0% of the company shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 2.11. Microsoft recorded earning per share (EPS) of 11.56. The entity last dividend was issued on the 15th of August 2024. The firm had 2:1 split on the 18th of February 2003.
To determine if Microsoft is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding Microsoft's research are outlined below:
About 74.0% of the company shares are owned by institutional investors
On 13th of June 2024 Microsoft paid $ 0.75 per share dividend to its current shareholders
Latest headline from finance.yahoo.com: Sylogist Announces Addition of Experienced SaaS Executive to its Board of Directors and Annual General Special Meeting Results

Microsoft Quarterly Cost Of Revenue

18.5 Billion

Microsoft uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in Microsoft. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to Microsoft's previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
23rd of April 2024
Upcoming Quarterly Report
View
23rd of July 2024
Next Financial Report
View
31st of March 2024
Next Fiscal Quarter End
View
23rd of July 2024
Next Fiscal Year End
View
31st of December 2023
Last Quarter Report
View
30th of June 2023
Last Financial Announcement
View
Earnings surprises can significantly impact Microsoft's stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises Microsoft's investors have experienced.
Reported
Fiscal Date
Estimated EPS
Reported EPS
Surprise
1998-01-21
1997-12-310.10.110.0110 
1997-01-17
1996-12-310.060.070.0116 
1996-04-18
1996-03-310.050.060.0120 
2001-10-18
2001-09-300.20.220.0210 
2000-04-20
2000-03-310.20.220.0210 
1999-10-19
1999-09-300.170.190.0211 
1999-07-19
1999-06-300.180.20.0211 
1998-10-20
1998-09-300.120.140.0216 

Microsoft Target Price Consensus

We track the performance of the top 100 financial experts across various large and mid-size financial boutiques. Microsoft target price is determined by taking all analyst projections and averaging them out. There is no one specific way to measure analysts' performance other than comparing it to past results via a very sophisticated attribution analysis. Microsoft's target price projections below should be used in combination with other traditional price prediction techniques such as stock price forecasting, investor sentiment analysis, technical analysis, earnings estimate, and various momentum models.
   58  Strong Buy
Most Microsoft analysts issue ratings four times a year, at intervals of three months. Ratings are usually accompanied by a target price to help potential investors understand Microsoft stock's fair price compared to its market value. Analysts arrive at stock ratings after researching the public financial statements of Microsoft, talking to its executives and customers, or listening to those companies' conference calls.
Macroaxis Advice   Exposure   Valuation

Microsoft Target Price Projection

Microsoft's current and average target prices are 441.58 and 392.34, respectively. The current price of Microsoft is the price at which Microsoft is currently trading. On the other hand, Microsoft's target price is what analysts think the stock is worth or could sell for in the future. The more significant the discrepancy between the two prices, the more it stimulates investors to act.

Current Price

Microsoft Market Quote on 14th of June 2024

Low Price441.58Odds
High Price441.58Odds

441.58

Target Price

Analyst Consensus On Microsoft Target Price

Low Estimate357.03Odds
High Estimate435.5Odds

392.34

Historical Lowest Forecast  357.03 Target Price  392.34 Highest Forecast  435.5
Note that most analysts generally publish their price targets in research reports on specific companies, along with recommendations for the company's stock.Although price targets are often quoted in the financial news media, there could be a delay between the publication of the latest analyst outlook on Microsoft and the information provided on this page.

Microsoft Analyst Ratings

Microsoft's analyst stock recommendations are determined by taking an average estimate of all analysts we track and classifying them as Strong Buy, Buy, Hold, Strong Sell, or Sell. Ratings generally communicate what analysts sense about Microsoft stock, and they use a lot of effort and time to analyze it and arrive at a rating. That suggests that analyst recommendations are the outcome of an objective and thorough examination of Microsoft's financials, market performance, and future outlook by experienced professionals. Microsoft's historical ratings below, therefore, can serve as a valuable tool for investors.

Know Microsoft's Top Institutional Investors

Have you ever been surprised when a price of an equity instrument such as Microsoft is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Microsoft backward and forwards among themselves. Microsoft's institutional investor refers to the entity that pools money to purchase Microsoft's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
Shares
Capital Research Global Investors2024-03-31
78.2 M
Northern Trust Corp2024-03-31
74.9 M
Bank Of America Corp2024-03-31
67.7 M
Bank Of New York Mellon Corp2024-03-31
65.9 M
Legal & General Group Plc2024-03-31
63.1 M
Wellington Management Company Llp2024-03-31
58.8 M
Nuveen Asset Management, Llc2024-03-31
52.6 M
Charles Schwab Investment Management Inc2024-03-31
45.4 M
Alliancebernstein L.p.2024-03-31
42.5 M
Vanguard Group Inc2024-03-31
668 M
Blackrock Inc2024-03-31
546 M
Note, although Microsoft's institutional investors appear to be way more sophisticated than retail investors, it remains unclear if professional active investment managers can reliably enhance risk-adjusted returns by an amount that exceeds fees and expenses.

Microsoft's market capitalization trends

The company currently falls under 'Mega-Cap' category with a current market capitalization of 3.28 T.

Market Cap

1.93 Trillion

Microsoft's profitablity analysis

Last ReportedProjected for Next Year
Return On Tangible Assets 0.25  0.22 
Return On Capital Employed 0.33  0.36 
Return On Assets 0.18  0.20 
Return On Equity 0.32  0.24 
The company has Profit Margin (PM) of 0.36 %, which maeans that even a very small decline in it revenue will erase profits resulting in a net loss. This is way below average. Similarly, it shows Operating Margin (OM) of 0.45 %, which suggests for every 100 dollars of sales, it generated a net operating income of $0.45.
Determining Microsoft's profitability involves analyzing its financial statements and using various financial metrics to determine if Microsoft is a good buy. For example, gross profit margin measures Microsoft's profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of Microsoft's profitability and make more informed investment decisions.

Microsoft's Earnings Breakdown by Geography

The data published in Microsoft's official financial statements typically reflect Microsoft's business processes, product offerings, services, and other fundamental events. However, there are additional fundamental indicators that are easier to understand and visualize along the underlying realities that are driving Microsoft's quantitative information. For example, before you start analyzing numbers published by Microsoft accountants, it’s essential to understand Microsoft's liquidity, profitability, and earnings quality within the context of the Software space in which it operates.
Please note, the imprecision that can be found in Microsoft's accounting process means that the reasonable investor should take a skeptical approach toward the financial statement analysis of Microsoft. Check Microsoft's Beneish M Score to see the likelihood of Microsoft's management manipulating its earnings.

Evaluate Microsoft's management efficiency

Microsoft has return on total asset (ROA) of 0.1541 % which means that it generated a profit of $0.1541 on every $100 spent on assets. This is way below average. Similarly, it shows a return on stockholder's equity (ROE) of 0.3849 %, meaning that it created $0.3849 on every $100 dollars invested by stockholders. Microsoft's management efficiency ratios could be used to measure how well Microsoft manages its routine affairs as well as how well it operates its assets and liabilities. At this time, Microsoft's Return On Capital Employed is comparatively stable compared to the past year. Return On Assets is likely to gain to 0.20 in 2024, whereas Return On Tangible Assets are likely to drop 0.22 in 2024. At this time, Microsoft's Total Current Liabilities is comparatively stable compared to the past year. Liabilities And Stockholders Equity is likely to gain to about 497.5 B in 2024, whereas Change To Liabilities is likely to drop slightly above 6.9 B in 2024.
Last ReportedProjected for Next Year
Book Value Per Share 24.93  26.17 
Tangible Book Value Per Share 15.59  16.37 
Enterprise Value Over EBITDA 28.01  21.25 
Price Book Value Ratio 14.14  9.01 
Enterprise Value Multiple 28.01  21.25 
Price Fair Value 14.14  9.01 
Enterprise Value1.9 TT
The analysis of Microsoft's management efficiency is an essential part of evaluating and assessing the financial and operational performance of the entity. It is also vital to analyze Microsoft's future growth prospects and the overall market conditions to determine the value and potential of its stock. The analysis involves studying a range of financial metrics such as revenue, earnings, profit margins, cash flow, debt, market share, and external factors such as economic trends, industry outlook, competition, and government regulations. The goal of Microsoft Stock analysis is to determine whether it is undervalued, fairly valued, or overvalued and to make informed investment decisions.
Dividend Yield
0.0069
Forward Dividend Yield
0.0069
Forward Dividend Rate
3
Beta
0.893

Basic technical analysis of Microsoft Stock

As of the 14th of June 2024, Microsoft secures the Mean Deviation of 0.9261, risk adjusted performance of 0.0574, and Downside Deviation of 1.34. In connection with fundamental indicators, the technical analysis model lets you check existing technical drivers of Microsoft, as well as the relationship between them.

Microsoft's insider trading activities

Some recent studies suggest that insider trading raises the cost of capital for securities issuers and decreases overall economic growth. Trading by specific Microsoft insiders, such as employees or executives, is commonly permitted as long as it does not rely on Microsoft's material information that is not in the public domain. Local jurisdictions usually require such trading to be reported in order to monitor insider transactions. In many U.S. states, trading conducted by corporate officers, key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. In these cases Microsoft insiders are required to file a Form 4 with the U.S. Securities and Exchange Commission (SEC) when buying or selling shares of their own companies.

Microsoft's Outstanding Corporate Bonds

Microsoft issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. Microsoft uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Microsoft bonds can be classified according to their maturity, which is the date when Microsoft has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.

Understand Microsoft's technical and predictive indicators

Using predictive indicators to make investment decisions involves analyzing Microsoft's various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.

Consider Microsoft's intraday indicators

Microsoft intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of Microsoft stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.

Microsoft Corporate Filings

F4
7th of June 2024
The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities
ViewVerify
31st of May 2024
Other Reports
ViewVerify
6th of May 2024
Other Reports
ViewVerify
26th of April 2024
Other Reports
ViewVerify
Microsoft time-series forecasting models is one of many Microsoft's stock analysis techniques aimed to predict future share value based on previously observed values. Time-series forecasting models ae widely used for non-stationary data. Non-stationary data are called the data whose statistical properties e.g. the mean and standard deviation are not constant over time but instead, these metrics vary over time. These non-stationary Microsoft's historical data is usually called time-series. Some empirical experimentation suggests that the statistical forecasting models outperform the models based exclusively on fundamental analysis to predict the direction of the market movement and maximize returns from investment trading.

Microsoft Stock media impact

Far too much social signal, news, headlines, and media speculation about Microsoft that are available to investors today. That information is available publicly through Microsoft media outlets and privately through word of mouth or via Microsoft internal channels. However, regardless of the origin, that massive amount of Microsoft data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of Microsoft news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of Microsoft relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to Microsoft's headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive Microsoft alpha.

Microsoft Historical Investor Sentiment

Investor biases related to Microsoft's public news can be used to forecast risks associated with an investment in Microsoft. The trend in average sentiment can be used to explain how an investor holding Microsoft can time the market purely based on public headlines and social activities around Microsoft. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Microsoft's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Microsoft and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average Microsoft news discussions. The higher the estimate score, the more favorable the investor's outlook on Microsoft.

Microsoft Maximum Pain Price across 2024-06-14 Option Contracts

Microsoft's options can also be used to analyze investors' bias and current market sentiment in the context of behavioral finance. For example, Max pain usually refers to a trading concept that asserts that market manipulation can cause the market price of Microsoft close to the expiration of its current option contract to expire worthlessly. According to most research, about 35% of options are not executed, with roughly 50% traded out before expiration. So, Max pain occurs when market makers reach a net favorable position across all options at a strike price where option holders stand to lose the most money. By contrast, option sellers may reap the most after selling more options than buying, causing them to expire worthlessly. Please continue to view the detailed analysis of Microsoft's options.

Microsoft Corporate Management

Hossein NowbarChief OfficerProfile
Brett IversenVice RelationsProfile
Christopher YoungStrategy DevelopmentProfile
Takeshi NumotoExecutive OfficerProfile
Keith EsqDeputy VPProfile

Additional Tools for Microsoft Stock Analysis

When running Microsoft's price analysis, check to measure Microsoft's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Microsoft is operating at the current time. Most of Microsoft's value examination focuses on studying past and present price action to predict the probability of Microsoft's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Microsoft's price. Additionally, you may evaluate how the addition of Microsoft to your portfolios can decrease your overall portfolio volatility.