Sign InSummary
Microsoft Corporation (MSFT) closed at 335.02 USD on June 23, 2023, with a predicted upward trend in the upcoming week based on the moving averages, and is rated as a Buy with caution due to potential overvaluation against earnings and recent reports of misaligned valuation affecting future stock performance.
Introduction
Microsoft Corporation (Ticker: MSFT) is a technology company that develops, licenses, and supports software products, services, and devices worldwide. The company operates in Productivity and Business Processes, Intelligent Cloud, and More Personal Computing segments.
Technical Analysis
MSFT's last close was at 335.02 USD on June 23, 2023. Trading volume was 21.21 million, which is lower than the average volume of 27.77 million. The stock experienced a -1.38% change during that trading day.
From a technical standpoint, the RSI14 is at 50, indicating a neutral position. The 50-day moving average is at 315.01 while the 200-day moving average is at 265.61, signifying an overall bullish trend. The MACD (3-month) stands at 7.59. The stock's price low was 333.45, and its price high was 337.95. Its year high and low are 351.47 and 213.43, respectively.
Considering the data provided, the stock price for the next trading day (June 26, 2023) could be predicted to fluctuate between 333.45 and 337.95, with a likely upward trend in the upcoming week based on the moving averages.
Fundamental Analysis
Microsoft has a market capitalization of 2.49 trillion USD and EPS of 9.24. The stock's PE ratio is 36.26, with 7.44 billion shares outstanding. The company is listed on the NASDAQ exchange.
Earnings announcement is expected on July 24, 2023. According to the discounted cash flow (DCF) analysis, the stock's value is 336.87. Analysts have projected a target high of 420, target low of 234, target consensus of 313.59, and target median of 300 for Microsoft stocks.
Since market participants are expecting a new Xbox console in 2028 and the company's interest in mobile gaming, there is potential for growth in this area. However, recent reports argue that Microsoft's valuation does not line up with its earnings, potentially affecting future stock performance.
News and Developments
Recent news and developments on Microsoft Corporation include:
1. Plans to release the next-generation Xbox in 2028, disclosed through unsealed court documents from the company's FTC trial.
2. Consideration to acquire Zynga in order to expand its presence in the mobile gaming space, eventually opting for a larger deal with Activision.
3. Expected benefits from the upcoming wave of the app economy, focused on VR headsets and artificial intelligence, driven by partnerships with tech giants.
Final Evaluation
Microsoft Corporation demonstrates technical strength, with its moving averages indicating an overall bullish trend. However, the stock's current fundamental metrics show potential overvaluation against earnings. Considering future growth potential from product developments, mobile gaming expansion, and tech partnerships, the stock is rated as a Buy, but with caution as the valuation might not line up with earnings.
