Earnings and Growth Analysis : Microsoft (NASDAQ:MSFT)

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Earnings results for Microsoft (NASDAQ:MSFT)

Microsoft Corporation is expected* to report earnings on 10/27/2020 after market close. The report will be for the fiscal Quarter ending Sep 2020. According to Zacks Investment Research, based on 13 analysts’ forecasts, the consensus EPS forecast for the quarter is $1.53. The reported EPS for the same quarter last year was $1.38.

Microsoft last released its quarterly earnings results on July 22nd, 2020. The software giant reported $1.46 EPS for the quarter, beating analysts’ consensus estimates of $1.34 by $0.12. The business earned $38.03 billion during the quarter, compared to analysts’ expectations of $36.59 billion. Microsoft has generated $5.76 earnings per share over the last year and currently has a price-to-earnings ratio of 36.5. Microsoft has confirmed that its next quarterly earnings report will be published on Tuesday, October 27th, 2020.

Analyst Opinion on Microsoft (NASDAQ:MSFT)

32 Wall Street analysts have issued ratings and price targets for Microsoft in the last 12 months. Their average twelve-month price target is $226.60, predicting that the stock has a possible upside of 7.86%. The high price target for MSFT is $260.00 and the low price target for MSFT is $170.00. There are currently 3 hold ratings, 28 buy ratings and 1 strong buy rating for the stock, resulting in a consensus rating of “Buy.”

Microsoft has received a consensus rating of Buy. The company’s average rating score is 2.94, and is based on 28 buy ratings, 3 hold ratings, and no sell ratings. According to analysts’ consensus price target of $226.60, Microsoft has a forecasted upside of 7.9% from its current price of $210.08. Microsoft has been the subject of 14 research reports in the past 90 days, demonstrating strong analyst interest in this stock.

Dividend Strength: Microsoft (NASDAQ:MSFT)

Microsoft has a dividend yield of 0.94%, which is in the bottom 25% of all stocks that pay dividends. Microsoft does not have a long track record of dividend growth. The dividend payout ratio of Microsoft is 35.42%. This payout ratio is at a healthy, sustainable level, below 75%. Based on earnings estimates, Microsoft will have a dividend payout ratio of 28.49% next year. This indicates that Microsoft will be able to sustain or increase its dividend.

Insiders buying/selling: Microsoft (NASDAQ:MSFT)

In the past three months, Microsoft insiders have sold more of their company’s stock than they have bought. Specifically, they have bought $0.00 in company stock and sold $35,247,737.00 in company stock. Only 1.39% of the stock of Microsoft is held by insiders. 69.93% of the stock of Microsoft is held by institutions. High institutional ownership can be a signal of strong market trust in this company.

Earnings and Valuation of Microsoft (NASDAQ:MSFT

Earnings for Microsoft are expected to grow by 12.58% in the coming year, from $6.36 to $7.16 per share. The P/E ratio of Microsoft is 36.54, which means that it is trading at a more expensive P/E ratio than the market average P/E ratio of about 19.34. The P/E ratio of Microsoft is 36.54, which means that it is trading at a less expensive P/E ratio than the Computer and Technology sector average P/E ratio of about 64.99. Microsoft has a PEG Ratio of 2.69. PEG Ratios above 1 indicate that a company could be overvalued. Microsoft has a P/B Ratio of 13.44. P/B Ratios above 3 indicate that a company could be overvalued with respect to its assets and liabilities.

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