Microsoft Stock Review & Analysis
Microsoft is currently the 2nd largest company in the world with a market cap of 3.2 Trillion dollars.
Today we are going to look at a load of financial statistics to get a feel of the company and it’s stock price. We are also going to compare Microsoft stats to 3 of it’s competitors; Alphabet, Apple & IBM. here’s our video:
If we look at the income statement we can see that annually total revenue has increased steadily to $245billion and so has the gross profit to $171billion
EBITDA which is Earnings before interest, taxes, and amortization and a popular figure to look at has risen in a similar fashion over the years to $133billion.
If we look at the Cash Flow statement we can see that Operating Cash Flow has increased to $ $118billion , and Investing Cash Flow is becoming more negative and recently stands at -$96billion .
Now let’s consider the margins and the higher the better. Microsoft has an Operating Margin of 44.64%, it has a Gross Margin of 69.76% and a Profit Margin of 35.96%. These 3 figures are all higher than the 3 selected competitors.
Microsoft has a Return on Assets of 19.07% and Return on Capital of 29.23%. These are significantly higher than IBM, but far lower than Alphabet.
Microsofts 1 year Earnings per share growth rate is 9.67% which is lower than all it’s competitors.
When looking at valuing the stock, the price ratios can give real insight. From a value investor point of view, the lower the better.
Microsoft has a Price to Earnings ratio of 37.17 which is higher than Alphabet, Apple & IBM. According to worldperatio.com The estimated P/E Ratio for S&P 500 Information Technology Sector is 38.44.
The Price to Free Cash Flow of 44.22 is also higher than it’s competitors as is the Price to Sales Ratio of 13.36.
Apple has a far higher Price to Book Value Per Share of 52.17 compared to 12.14.
Let’s now look at the fair value of Microsoft stock. The site Simply Wall street gives it a fair value of $571 suggesting that is currently undervalued by 23.2%.
Morningstar has given Microsoft a Fair Value Estimate of $490. Also suggesting that’s it’s current price of $436 is undervalued.
Finally a look at Analyst recommendations shows that the majority of analysts are leaning towards a buy. Please take these opinions lightly.
Thanks for watching and if you’ve enjoyed this video please remember to like, comment and subscribe.
In the video we referenced information from the following:
https://uk.finance.yahoo.com/
https://uk.investing.com/
https://www. Stockanalysis.com/
https://companiesmarketcap.com/
https://worldperatio.com/
https://www.morningstar.com/
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DISCLAIMER:
The Modest Investor may not have positions in the stocks mentioned. Stats are created by us to the best of our ability and figures are found on what we deem to be reliable information. Everything we publish is thoroughly researched. We present financial and investment information and will on occasion express our opinion on these. The information provided throughout our website is not and cannot ever be intended either as investment, financial, tax, legal advice or otherwise.
