Looking at the details, the company reported second-quarter revenue between $ 39.5 billion and $ 40.4 billion. If we look at these divisional projections and divide the gap, we have a revenue potential of around $ 40 billion in the second quarter. This shows that the company’s annual growth rate is around 9%. However, that number is still slightly lower than previous market expectations ($ 40.43 billion), which allows investors to sell their shares when the broader market is prone to downward volatility. There is a possibility of a bearish argument.
Corporate sales increased 12% annually for the most recent quarter, but this was only a slight decrease from the 13% sales growth recorded in the previous quarter.
MSFT expects quarterly revenue growth of 8.9% through December 2020 and 10.7% through 2021. The company’s EPS is expected to grow 17.5% annually in 2021 and 14.5 % per annum over the next five years.
Microsoft Corp. (NASDAQ: MSFT) has been on a downward trend since early September and has continued to decline following the announcement of its first quarter financial results. On the flip side, Microsoft’s guidance suggests investors should be willing to accept more pain points than originally anticipated, and these factors continue to put pressure on stocks. It suggests there is a possibility. When this anticipated downward trend materializes, many investors view that they should consider buying MSFT for nearly $ 202 per share.
All things are not good for Microsoft
On the other hand, it highlighted some potential concerns about Microsoft’s licensing revenues. This is mainly due to a -5% decrease in Windows device licenses in Microsoft’s most recent reporting period. Commercial devices, in particular, saw licensing revenue drop 20% or more, after falling 4% in the fourth quarter.
This is the weakest number for Microsoft in more than five years, and tech-focused income investors feel they need to keep monitoring these numbers for Microsoft’s next review period. This aspect of Microsoft’s business also fell 10% in the last reporting period and current projections suggest that the decline will continue into the next quarter. So, there are other concerns about search-associated advertising. It is a slow pace. Fortunately, the positives outweigh the negatives and continue to monitor the growth of Microsoft’s cloud products. Microsoft Azure has been a major growth engine over the past few quarters, showing signs of bottoming out in the first quarter when it posted 48% growth. For the company, this performance far exceeded analysts’ expectations by 44%. Hence, we suggest investing in MSFT stock with a long term view. You can check other information like income statement at https://www.webull.com/income-statement/nasdaq-msft before stock buying.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.