Microsoft Earnings Preview: Another Case of Low Expectations for a MegaCap Name

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Stocks Analysis by Brian Gilmartin covering: Microsoft Corporation. Read Brian Gilmartin's latest article on Investing.com

Looking at these estimates, the first thought I had was, “Why are EPS and operating income y-o-y growth rates so low ?” and at first glance, the EPS and operating income “upside surprise” were sizable in the September ’23 quarter at 13% and 11% respectively.

Finally, another reason the stock trades like a wet blanket has been thrown over it, is that Microsoft said that the three segments reporting results each quarter – i.e.

Microsoft’s fiscal ’25 revenue estimate was looking wobbly but it has returned to normal in the last few months. Have to say, revenue estimates for Microsoft have held up better than forward EPS estimates.At $428 per share, Microsoft is trading at 33x expected ’25 EPS growth of 11%, so today as it stands Microsoft is the opposite of Goggle and a stock that’s cheap on a PEG or PE-to-growth basis.

 

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