Microsoft Takes Center Stage: Key Earnings Insights Explored

Microsoft's stock has shown a modest -7% return lately. Key earnings insights include an expected EPS of $3.20, marking an 8.8% annual change. Revenue growth also looks promising, projected at +10.5% for the current quarter, suggesting a potentially stable outlook.

Date: 22-03-2025

AI Rating: 7

Earnings Per Share (EPS): Microsoft is projected to post an EPS of $3.20 for the current quarter, which represents an increase of +8.8% compared to the same quarter last year. The consensus EPS estimate for the current fiscal year stands at $13.08, reflecting an anticipated year-over-year increase of +10.9%. For the next fiscal year, the EPS estimate is $14.71, indicating a +12.4% change, which shows a consistent positive trend in earnings estimates.

Revenue Growth: The consensus sales estimate for Microsoft in the current quarter is $68.37 billion, signifying a year-over-year change of +10.5%. Furthermore, for the current and next fiscal years, the revenue estimates are $276.15 billion and $311.74 billion, suggesting growth rates of +12.7% and +12.9%, respectively. These figures indicate that Microsoft is likely to achieve strong revenue growth, which is essential for sustaining earnings growth over time.

Company Performance and Market Conditions: Despite recent volatility, Microsoft has performed slightly better than the overall market and its industry counterparts in terms of stock performance. The company also has a robust record of beating EPS and revenue estimates, showcasing its financial resilience. Nevertheless, it has a Zacks Rank #3 (Hold), implying that it is expected to perform in line with market trends moving forward.

Valuation: Microsoft is graded D in terms of value style score, indicating it is trading at a premium relative to its peers. This might raise concerns regarding its valuation if growth does not keep pace with expectations.

Overall, Microsoft's consistent earnings growth and revenue forecasts suggest that it remains a versatile option for investors, although its valuation merits caution.

Stocks: MSFT