Sep 24, 2020
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Is Microsoft Undervalued?

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A box with the Microsoft logo on it standing on a shopping bag decorated with the 12 star European. [+] BLOOMBERG NEWS No as per Trefis Price estimate Microsoft s stock has a good value of $158 that’s in line with the current market price. Microsoft is a technology company that makes money from the sale of software and hardware for consumer and enterprises


Their products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. Additionally they design manufacture and sell devices including PCs tablets gaming and entertainment consoles other intelligent devices and related accessories. During this note we discuss our stock price valuation for Microsoft


You could investigate our interactive dashboard analysis ~Microsoft s valuation: Expensive or Cheap? ~ for more details and likewise modify our forecasts for the corporate s key metrics to understand how changes impact the corporate s stock price. #1. Estimating Microsoft s Total Revenues: Total Revenue increased from $96. 6 billion in 2017 to $125


8 billion in 2019 and is predicted to increase by 6. 7% to $134. 3 billion in 2020 (ended June 2020). Our Interactive Dashboard Analysis How Does Microsoft Make Money? provides an in depth view of Microsoft s Revenue. #2. Deriving Microsoft s Net Income: Net Income rose from $25. 5 billion in 2017 to $39


2 billion in 2019 and is predicted to be around $43 billion in 2020. This rise is often by means of higher revenues and better margins. PROMOTED Civic Nation BRANDVOICE | Paid Program
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Determining Microsoft s EPS: EPS rose from $3. 25 in 2017 to $5. 06 in 2019 and we estimate it to be $5. 61 in 2020. EPS rise in 2018 may be attributed to raised Net Income and lower Shares outstanding. #4. Estimating Microsoft s Share Price: Our Price Estimate of $158 for Microsoft s Stock is in line with our Detailed Valuation Model and implies a 28


1x P/E Multiple on expected 2020 EPS of $5. 61. Our interactive dashboard captures how Microsoft compares with its competitors Apple and Oracle when it comes to Revenue and P/E multiple. What s behind Trefis? See How It s Powering New Collaboration and What-Ifs For CFOs and Finance Teams| Product R&D and Marketing Teams More Trefis Data Like our charts? Explore example interactive dashboards and create your own

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