Microsoft Stock FY2024 Q1 Third-party Analysts' Forecast & Preview

Microsoft (MSFT) stock has rallied significantly so far in 2023, gaining over 30% as of August 30. This has lifted Microsoft's valuation and share price to levels that may make it difficult for shareholders to see market-beating returns in the short term. However, Microsoft recently concluded an excellent fiscal year in 2023, with annual revenue up 11% and operating earnings up 14%. 

The company benefited from enterprises shifting to the cloud, despite weaknesses in the PC business. According to The Motley Fool, while the stock may be expensive currently trading at over 11 times annual sales, Microsoft's market position, brand power, and diversity appear to make it an attractive long-term investment.

Source: Where Will Microsoft Stock Be in 3 Years? (The Motley Fool) >>

Part 2：Microsoft FY2023 Q4 Earnings Report Recap

1. Microsoft Key Indicators and Historical Earnings Report

• - Microsoft FY2023 Q4 EPS was $2.69, YOY +20.63%
• - Microsoft PE Ratio today is 32.80 
• - Microsoft FY2023 Q4 Revenue was $56.2B, YOY +8.34% 
• - Microsoft FY2023 Q4 FCF was $19.8B, YOY +11.65%
• - Microsoft FY2023 Q4 Current Ratio was 1.77, YOY -0.87% 
• - Microsoft FY2023 Q4 ROA was 5.07%, YOY +7.44%
• - Microsoft FY2023 Q4 ROE was 10.02%, YOY -1.42%
• - Microsoft FY2023 Q4 Gross Margin was 70.11%, YOY +2.61% 
• - Microsoft FY2023 Q4 Net Margin was 35.74%, YOY +10.73%

For more information, such as definitions and explanations of the above technical terms, please view:

Interpretation of Key Indicators >>

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2. Microsoft FY2023 Q4 Business Highlights

● Office Commercial products and cloud services revenue was up 12% (increased 14% in constant currency), driven by Office 365 Commercial revenue growth of 15% (up 17% in constant currency).
● Office Consumer products and cloud services revenue increased 3% (up 6% in constant currency) and Microsoft 365 Consumer subscribers grew to 67.0 million.
● LinkedIn revenue increased 5% (up 7% in constant currency).
● Dynamics products and cloud services revenue increased 19% (up 21% in constant currency) driven by Dynamics 365 revenue growth of 26% (up 28% in constant currency).
● Server products and cloud services revenue increased 17% (up 18% in constant currency) driven by Azure and other cloud services revenue growth of 26% (up 27% in constant currency).
● Devices revenue decreased 20% (down 18% in constant currency).
● Windows Commercial products and cloud services revenue increased 2% (up 3% in constant currency).
● Xbox content and services revenue increased 5% (up 6% in constant currency).
● Search and news advertising revenue excluding traffic acquisition costs increased 8%.

Source: Microsoft Earnings Release FY23 Q4 (microsoft.com) >>

3. Microsoft FY2023 Q4 Financial Statement Analysis

• Key Takeaways
  - MSFT continues to perform well fundamentally, but growth is moderating amid macro uncertainty. The cloud segment remains a bright spot.
  - Management is controlling costs well, protecting profitability. But slower revenue requires continued discipline.
  - MSFT expects gradual growth from AI services, a key area of investment. But benefits likely won't accrue until 2H FY2024.
  Regulatory overhang remains regarding the Activision deal, though optimism is building it will close.
•  
• Revenue and Growth
  ● MSFT reported Q4 FY2022 revenue of $56.19 billion, up 8% year-over-year. This was slightly above analyst expectations of $55.47 billion.
  ● Revenue growth has slowed to single digits for three consecutive quarters, down from over 10% growth in previous quarters. This indicates slowing demand.
  ● MSFT expects Q1 FY2023 revenue of $53.8-$54.8 billion, implying 8% YoY growth at the midpoint. This is below analyst expectations of $54.94 billion.
•  
• Operating Segments
  ● Intelligent Cloud revenue was $23.99 billion, up 15% YoY. Azure cloud revenue grew 26% YoY, down from 40% growth a year ago but above expectations of 25% growth. This indicates robust cloud demand but moderating growth rates.
  ● Productivity & Business Processes revenue was $18.29 billion, up 10% YoY driven by Office and LinkedIn.
  ● More Personal Computing revenue was $13.91 billion, down 4% YoY due to tough PC shipment comparisons. However, Windows licensing revenue beat expectations.
•  
• Profitability
  ● Net income was $20.08 billion, up 20% YoY, driven by revenue growth and cost discipline.
  ● Operating expenses only grew 2% YoY as MSFT controlled costs. R&D expenses declined YoY for the first time since 2016.

Source: Microsoft shares dip after quarterly revenue guidance misses expectations. (www.cnbc.com) >>

Part 3：Microsoft FY2024 Q1 Earnings Report Forecast & Preview

1. Microsoft FY2024 Q1 Forecast By Third Party Analyst Rating, September 26th

Following an extensive evaluation of Tesla's financial data, revenue, and stock trends over the last few quarters by more than 35 third-party financial analysts, MSFT Stock has been given a Strong Buy rating. Analysts forecast an average stock price of $397.730 (Average) for the next 12 months.

- Third Party Analyst rating: Strong Buy

- Microsoft Price Target: $397.730

- Forecast of FY2024 Q1 EPS: $2.651

- Forecast of FY2024 Q1 Revenue: $54.5B

- Forecast of FY2024 Q1 EBIT: $24.1B

Source: https://www.benzinga.com/quote/MSFT/analyst-ratings

For more information on what the analyst ratings may mean, visit https://pro.benzinga.com/blog/what-do-stock-analyst-ratings-mean/ (Benzinga is not affiliated with Moomoo Technologies Inc., Moomoo Financial Inc., or its affiliates.)

2. Microsoft Forecast By Technical Analysis, September 26th, 2023

For more information, such as definitions and explanations of the above technical terms, please view: 

Interpretation of technical indicators >>

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