Microsoft Quarterly Earnings: What to Expect

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If you’ve been wondering whether to invest in Microsoft, this quarter’s earnings season results may help you make your decision. Unfortunately, geopolitical uncertainty, high inflation, and headwinds from the Fed’s aggressive monetary policy tightening have created a gloomy economic outlook for Microsoft. Will these combining factors impact its upcoming Q3 ’22 earnings report on April 26th? This article will look at what analysts expect and their outlook on the stock.

EPS and Revenue Results

Microsoft has a long track of beating analysts’ forecasts. In its Q2 report, the tech giant beat both EPS and revenue estimates, reporting earnings per share of $2.48 EPS, $0.16 higher than consensus estimates of $2.32 and reported revenue of $51.73 billion, $99 million higher than consensus estimates of $50.74 billion. 

In its Q2 report, EPS also grew by 22.17% from the reported EPS for the same quarter last year. Revenue was up 20.08% from the reported revenue for the same quarter last year. 

Microsoft building

However, analysts are expecting its earnings to decline in Q3. With EPS expected to fall from $2.48 to $2.19, representing a decline of 11.69%. Revenue is also expected to decrease from $51.73 billion to $49.04 billion, representing a decline of 5.20%.

What are Analysts’ Price Targets for Microsoft?

Microsoft stock has recently received attention from several analysts. Here are their price targets for the company:

  • Summit Insights reiterated its “buy” rating on Microsoft stock. 
  • Mizuho dropped their target price on Microsoft shares from $360.00 to $350.00. 
  • Tigress Financial raised its price objective from $366.00 to $411.00 and gave it a “buy” rating.
  • Sumitomo Mitsui Financial Group gave them an “outperform” rating and a $410.00 target price. 
  • The Goldman Sachs Group placed a $400.00 price target on Microsoft shares. 
  • The stock has a hold rating from one analyst, thirty-three have given it a buy rating, and one has a strong buy rating. 
  • Microsoft currently has a consensus rating of “Buy” and a consensus price target of $357.68, according to MarketBeat.com.

Some Extra Statistics To Remember

Microsoft’s Intelligent Cloud segment is projected to have revenues of around $19 billion. This includes Azure. Then, for extra personal computing, including things like Xbox, Surface, and Windows, the projected revenue is of around $14.3 billion, according to the Wall Street Journal. 

It is important to note that unfavorable foreign exchange moves can easily cut revenue growth percentages. This cut can go as high as 2%. Also, when the statistics were done by experts, Microsoft’s Nuance Communications acquisition, which was done in March, was not taken into account. Due to this, it is possible that a drag of around 2% is also going to appear. 

Microsoft logo

Microsoft’s work done in the cloud sector should protect some of the losses ad the bullish sentiment we now see on stocks. What is particularly bullish is Office 365, which is the cloud-based version of the office productivity suite with which Microsoft dominates the market. Azure has an expected growth of 46%, which is not much when it comes to gains. As a result, with all the negatives and positives taken into account, Microsoft stock is expected to target around $352. 

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If you are interested in looking even further into the future so you can plan an investment strategy with Microsoft stocks, you should be aware of the expected June revenues. According to the Wall Street Journal, the numbers expected are the following:

  • Expected Overall Revenue – $52.75 billion
  • Expected Business and Productivity Processes Revenue – $16.68 billion
  • Expected Intelligent Cloud Revenue – $20.88 billion
  • Expected Personal Computing Revenue – $14.96 billion

You are officially expected to achieve a profit of $2.37 per share, which is not bad for the large investors but not that much for the smaller investors. 

Should you Trade Microsoft’s Quarterly Earnings?

Microsoft’s quarterly earnings report is likely to cause volatility for the stock and could present an ideal trading opportunity to profit. If you’re ready to trade its earnings, make sure you open a trade with a reputable broker that offers robust risk management tools. A popular broker that matches these requirements is easyMarkets. Click here to learn more about its excellent trading tools and conditions. Also, make sure to use due diligence and never invest what you cannot afford to lose.

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