How Has Microsoft’s Recent Performance Shaped Up?

Microsoft’s financial performance

Microsoft’s (MSFT) revenue rose at a four-year CAGR (compound annual growth rate) of 6% to $110.4 billion in fiscal 2018, which ended on June 30, 2018. Its net income rose at a four-year CAGR of 8% to $30.3 billion. Its revenue rose 14% to $110.4 billion in the quarter.

The company’s Productivity and Business Processes, Intelligent Cloud, and More Personal Computing segments made up 32%, 29%, and 38% of its revenue, respectively. Their combined net income improved 18% to $30.3 billion.
How Has Microsoft’s Recent Performance Shaped Up?

Describing the projections

Microsoft’s revenue forecasts for fiscal 2019, fiscal 2020, and fiscal 2021 are $122.9 billion, $135.9 billion, and $151.2 billion, respectively. Its expected net incomes for the periods are $33.2 billion, $37.8 billion, and $43.6 billion, respectively.

MSFT has “strong buy,” “buy,” and “hold” recommendations from 16, 16, and two analysts, respectively. The stock has a “strong sell” recommendation from one analyst. Its PE forecasts for fiscal 2019, fiscal 2020, and fiscal 2021 are 24.8x, 21.6x, and 18.6x, respectively.

MSFT versus the indexes

At the end of last week, MSFT had beaten the NASDAQ Composite Index and the S&P 500 Systems Software Index in the last month, in the last three months, in the last year, and year-to-date. The stock closed at a 9% discount to its 52-week high and a 39% premium to its 52-week low at the end of the week.

October developments

Recently, Microsoft partnered with Redline Communications to bring affordable and accessible broadband to rural areas in the United States and around the world. The company has also partnered with Southeast Asian on-demand transportation, mobile payment, and online-to-offline services platform Grab. The two companies will work toward big data, AI, and mobility solutions.