Understanding Microsoft’s Value Proposition in the US Software Space
Microsoft (MSFT) has continued to be the largest software player by market capitalization on a global scale (as of October 24, 2016), followed by Oracle.
Of the 40 analyst recommendations on Microsoft’s stock, ~58% have issued a “buy,” and 32% have issued a “hold.” The remaining 10% have issued a “sell.”
Although Amazon, Microsoft, IBM, and Google collectively reported a 68% growth in the cloud space, Google and Microsoft each reported triple-digit growth.
Microsoft’s Azure continues to see increased adoption. But Office 365 and Dynamics were also instrumental in its 100% growth in the cloud in calendar 2Q16.
Because Microsoft (MSFT) has more cash overseas than other S&P 500 companies, it’s more vulnerable than many peers if the US dollar strengthens.
In 1Q17, Microsoft’s (MSFT) Azure revenues rose 121.1% in constant currency terms, with its computing usage, more than doubling on a YoY basis.
In fiscal 1Q17, Microsoft’s gross margin stood at ~61.7%, as compared to ~64.7% in fiscal 1Q16. Intelligent Cloud contributed ~34% to total revenues.
In 1Q17, Microsoft’s (MSFT) Intelligent Cloud grew 8% on a YoY basis to ~$6.4 billion. In constant currency terms, the growth was 10%.
Microsoft’s MPC segment’s revenues fell by 2% to $9.3 billion in fiscal 2Q16. In constant currency terms, this decline was 1%.
In Microsoft’s MPC segment, gaming revenue fell 5%, led by “lower Xbox console revenue.” Higher Xbox software and services revenue counterbalanced the fall.
In fiscal 1Q17, Microsoft’s (MSFT) Productivity Business Processes segment grew 8% to $6.7 billion in constant currency terms.
On October 21, 2016, Microsoft’s (MSFT) stock rose close to 6%, reaching an all-time high after breaking the threshold of $60.
Of the 15 analysts covering Computer Sciences (CSC) stock, five have given it a “buy” recommendation, and ten have given it a “hold.”
In September 2016, Gartner named Computer Sciences (CSC) one of the leaders in its Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, North America.
US-based (SPY) Computer Sciences (CSC) will be announcing its fiscal 2Q17 results on November 3, 2016. Analysts estimate that it will post revenue of $1.9 billion.
GoPro (GPRO) has a market cap of $1.9 billion. It fell 7.0% to close at $13.88 per share on October 24, 2016.
Motorola Solutions’ operating expenses rose from ~$2.1 billion in 2013 to ~$3.7 billion in 2014. Operating expenses fell to $1.7 billion in 2015.
Motorola Solutions’ share price has risen 8.8% YTD. It has risen 1.9% in the trailing-five-day period and 5.7% in the trailing-12-month period.
For 2016, Motorola Solutions (MSI) is expecting revenue growth between 5% and 7%, with non-GAAP EPS somewhere between $4.45 and $4.65.
Analysts estimate that Motorola Solutions will post revenues of $1.52 billion for 3Q16, with a low estimate of $1.49 billion and a high of $1.54 billion.