No. of Recommendations: 2
Microsoft's year-over-year sales and earnings growth during the latest reported quarter (fiscal Q1 2024, which ended September 30, 2023) were:
Sales:
12.76% increase: Revenue for the quarter ending September 30, 2023 was $56.517 billion, a 12.76% increase from the same quarter in 2022.
24% growth in Microsoft Cloud: This segment, which includes Azure, Office 365, and other cloud services, saw even stronger growth at 24% year-over-year (23% in constant currency).
Earnings:
27% increase in diluted EPS: Microsoft's diluted earnings per share (EPS) were $2.99, a 27% increase from $2.35 in the same quarter of the previous year.
Microsoft also provided a forecast for its fiscal second quarter of 2024 (ending December 31, 2023):
Revenue:
$60.4 billion to $61.4 billion: This represents a range of 15% to 16% growth year-over-year.
So Microsoft said its YoY sales growth will accelerate from 12.8% last Q to 15% this Q. Analysts see the primary drivers of this growth being 1) continued momentum in Azure and 2) Microsoft 365 Copilot, an AI-powered assistant within Office 365, which is seen as a game-changer for productivity software. Analysts believe its potential to boost user efficiency and create new revenue streams is substantial.
No. of Recommendations: 3
Revenue:
$60.4 billion to $61.4 billion: This represents a range of 15% to 16% growth year-over-year.Lots to be happy about as MSFT shareholder with revenue growth hitting double digits once again after a few quarters of slower growth. It seems plausible that this time next year we could be looking at a TTM run rate of $245B+ of revenue.
EPS growth should run slightly ahead of revenue growth slightly with buy backs helping.
CQ Revenue EPS
2024-Q3 $62.09B (+ 9%) $3.35 (+12%) TTM: $11.89
2024-Q2 $61.63B (+ 9%) $3.01 (+12%)
2024-Q1 $58.37B (+10%) $2.82 (+15%)
2023-Q4 $60.66B (+15%) $2.71 (+17%)
2023-Q3 $56.52B $2.99
2023-Q2 $56.19B $2.69
2023-Q1 $52.86B $2.45
2022-Q4 $52.75B $2.32
2022-Q3 $50.12B $2.35
Historically MSFT has traded in a range of 26x to 38x of their TTM EPS. If we take the midpoint of these multiples we get 32x or an implied stock target of $380 this time next year. The business is doing well, but the stock is priced to perfection right now.
tecmo
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