Microsoft Corp. (NASDAQ: MSFT) will report its Q2 earnings on July 25, 2023, and Wall Street expects positivity; MSFT Stock fell 1.10% in a week. Data suggests, since Satya Nadella became the company’s CEO in 2014, his leadership and vision have pushed the stock price to soar by nearly 1,000%.
Microsoft Corp. (MSFT) Stock – Financial Analysis
When Satya Nadella took over as the CEO on February 4, 2014, MSFT’s share price was $36.35, which touched its all-time high of $364.02 in about ten years. During this time-lapse, S&P 500 grew only 148%. His leadership also led the company to boast a market cap of around $2.59 Trillion, following Apple at approximately $3 Trillion.
It was recently announced that Microsoft may soon start a $30 per-month subscription service to supplement its Office 365 products. This move could rake in an additional $14 Billion in revenue. In 2022, the tech giant reported a jump of 18% in revenue of $198.2 Billion, while profits swelled by 19% to $72.7 Billion.
Past and planned acquisitions would also boost the revenue. As per the data, Microsoft acquired LinkedIn for $26 Billion in 2016, and in 2018, it acquired GitHub for $7.5 Billion.
If the recent controversial acquisition is considered, the purchased video game developer ActivisiionBlizzard was bought for $68.7 Billion. All these buying should help the company expand its vertices and generate significant revenue streams.
Microsoft Corp. (NASDAQ: MSFT) – Technical Analysis
At press time, MSFT stock is trading at $343.77, dropping by 0.89%; previous close and open were at $346.87 and $349.15 respectively. The 52-week range is from $213.43 to $366.78, indicating that the current price is closer to upper levels. With a volume of 67.63 Million shares, the market cap is at $2.556 Trillion.
The trailing twelve-month (TTM) price-to-earnings (P/E) ratio is 37.24, indicative of a slightly overvalued stock.
At the same time, the TTM earnings paper share (EPS) is $9.23, indicating strength. Analysts placed a price target at $356.35 with a 4.2% upside and provided a 2.86 rating for moderate buy.
Microsoft reported its last earnings on April 25, 2023, where the reported revenue of $52.857 Billion surpassed the expected value of $51.019 Billion by 3.60%; compared to the previous quarter, the value soared by 7.08%.
The reported earnings of $2.45 per share exceeded the estimated value of $2.239 by 9.42%, which soared by 10.46% as compared to the previous quarter.
The subsequent earnings will be reported on July 25, 2023; estimations are that there shall be a 6.5% year-over-year (YoY) decline in earnings per share, and it shall be around $2.55 per share.
At the same time, revenue is believed to grow by about 3% and should be reported at about $55.468 Billion. This growth rate is comparable to September 2021, as specific values have declined.
Operating margin (TTM) gained 41.41% while operating expenses jumped 7.44% to $14.38 Billion. The (TTM) revenue is $207.59 Billion, while the (YoY) quarterly revenue growth is 7.10%.
The total cash in hand at the end of the most recent quarter (MRQ) is $104.42 Billion. In a similar time frame, total debt is reported to be $79.31 Billion.
Microsoft Corp. (MSFT Stock) – Candle Exploration
The last positive earnings caused a jump of around 7.9%, and the price action has been ascending ever since, as denoted by the trend line.
If the rally continues, the current 52-week high can be surpassed to create new highs for 2023. With the buzz around AI still being hot, the scenario might come true.
Although the ascending EMA hints at a rally, a stooping RSI and 53.98 suggest a slight drop. If the price goes south, it should bounce off the trendline; if not, it should reflect from immediate resistance at $326.92.
However, the chances of prices getting beyond buying zone are slim but the upcoming Fed rate scenario could make it happen.
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Source: https://www.thecoinrepublic.com/2023/07/22/microsoft-corp-msft-stock-preview-of-earnings-on-july-25/