Microsoft Corporation (NASDAQ: MSFT) stock jumped 0.85% on Friday to $240.98 against a previous-day closing price of $238.95. With 30.97 million shares changed hands, the volume of the stock remained heavier than its average volume of 24.46 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $243.86 whereas the lowest price it dropped to was $237.57. The 52-week range on MSFT shows that it touched its highest point at $349.67 and its lowest point at $238.90 during that stretch. It currently has a 1-year price target of $331.08. With its current market cap of 1801.90 billion, MSFT has annualized dividend of $2.48 while the current yield stands at 1.03%. Beta for the stock currently stands at 0.95.
Price Performance and Earnings:
Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of MSFT was down-trending over the past week, with a drop of -1.79%, but this was down by -12.83% over a month. Three-month performance dropped to -6.91% while six-month performance fell -19.54%. The stock lost -19.29% in the past year, while it has lost -28.35% so far this year. A look at the trailing 12-month EPS for MSFT yields 9.64 with Next year EPS estimates of 11.95. For the next quarter, that number is 2.32. This implies an EPS growth rate of 19.80% for this year and 18.03% for next year. EPS is expected to grow by 15.41% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 24.30%.
Float and Shares Shorts:
At present, 7.47 billion MSFT shares are outstanding with a float of 7.43 billion shares on hand for trading. On Aug 30, 2022, short shares totaled 40.54 million, which was 0.54% higher than short shares on Jul 28, 2022. In addition to Mr. Satya Nadella as the firm’s Chairman & CEO, Mr. Bradford L. Smith LCA serves as its Pres & Vice Chairman.
Through their ownership of 72.06% of MSFT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.32% of MSFT, in contrast to 41.59% held by mutual funds. Shares owned by individuals account for 30.22%. As the largest shareholder in MSFT with 8.01% of the stake, The Vanguard Group, Inc. holds 597,549,927 shares worth 597,549,927. A second-largest stockholder of MSFT, BlackRock Fund Advisors, holds 333,373,626 shares, controlling over 4.47% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in MSFT, holding 293,557,993 shares or 3.94% stake. With a 2.97% stake in MSFT, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 221,437,361 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.24% of MSFT stock, is the second-largest Mutual Fund holder. It holds 166,912,332 shares valued at 43.64 billion. Fidelity 500 Index Fund holds 1.08% of the stake in MSFT, owning 80,305,212 shares worth 21.0 billion.
An Overview of Recent Financials:
Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, MSFT reported revenue of $51.87B and operating income of $20.53B. Over the past year, revenue came in at $198.27B while operating income stood at $83.38B. It generated $16.74B net income for the quarter, which came to $72.74B over the last twelve months. The EBITDA in the recently reported quarter was $25.04B and diluted EPS was $2.23. EBITDA for the full year was $99.91B.
Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MSFT since 46 analysts follow the stock currently. There are 38 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With MSFT analysts setting a high price target of $400.00 and a low target of $275.00, the average target price over the next 12 months is $327.18. Based on these targets, MSFT could surge 65.99% to reach the target high and rise by 14.12% to reach the target low. Reaching the average price target will result in a growth of 35.77% from current levels.
EPS: Estimates vs Actual
It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. MSFT will report FY 2023 earnings on 07/20/2023. Analysts have provided yearly estimates in a range of $10.64 being high and $9.88 being low. For MSFT, this leads to a yearly average estimate of $10.13. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Microsoft Corporation surprised analysts by -$0.06 when it reported $2.23 EPS against a consensus estimate of $2.29. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $2.54 and the low estimate is $2.25. The average estimate for the next quarter is thus $2.33.
Dividends & Yield:
In terms of dividends, MSFT has a current ratio of $2.72, which is $2.72 over the trailing 12-months, while a dividend of $1.95 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and MSFT currently yields $1.03. In the past year, MSFT’s dividend yield has been $1.03, but when looking at the stock over the past five years, its yield has been $1.22. Accordingly, MSFT has a current buyback yield of $1.72. This was $1.72 for the TTM, and it was $1.39 for the past five years.
Summary of Insider Activity:
Insiders traded MSFT stock several times over the past three months with 14 Buys and 26 Sells. In these transactions, 402,198 shares were bought while 296,139 shares were sold. The number of buy transactions has increased to 34 while that of sell transactions has risen to 70 over the past year. The total number of shares bought during that period was 413,072 while 1,378,580 shares were sold.