MSFT
Microsoft Corporation
TMT
11/06/2020
Presented
| Date | 11/02/2020 |
| Price | $202.33 |
| Market Cap | $1,529.72B |
| Ent Value | $1,551.53B |
| P/E Ratio | 32.64x |
| Book Value | $16.31 |
| Div Yield | 1.01% |
| Shares O/S | 7,560.50M |
| Ave Daily Vol | 32,665,243 |
| Short Int | 0.46% |
Current
| Price | $418.74 |
| Market Cap | $3,112.51B |
| Microsoft Corp. engages in the development and support of software, services, devices, and solutions. It operates through the following business segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing. The Productivity and Business Processes segment comprises products and services in the portfolio of productivity, communication, and information services of the company spanning a variety of devices and platform. The Intelligent Cloud segment refers to the public, private, and hybrid serve products and cloud services of the company which can power modern business. The More Personal Computing segment encompasses products and services geared towards the interests of end users, developers, and IT professionals across all devices. The firm also offers operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games; personal computers, tablets; gaming and entertainment consoles; other intelligent devices; and related accessories. The company was founded by Paul Gardner Allen and William Henry Gates III in 1975 and is headquartered in Redmond, WA. |
Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Microsoft Corp (MSFT), Netflix Inc (NFLX)
Highlights
The presenter is long shares of Microsoft Corp (MSFT), which has lagged the overall market over the past six months and has been relatively flat since late June. He notes that the sell side and management generally does a great job keeping expectations in line with realistic outcomes, but there is so much operating leverage in the business that he is “easily” 15% above Street estimates for CY2022 (FYE June 30) given his bullish outlook for Office 365, Azure, LinkedIn, and MSFT’s gaming and advertising businesses. At the current ~$200 share price, he believes the risk/reward setup is attractive for investors with a time horizon longer than one year. His base case is targeting a share price of ~$270 (35% upside) based on a 2022 EPS of ~$9 and a 30x earnings multiple, and in the meantime he sees downside of ~$175 per share (12.5% downside, outlined in the last paragraph).
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.