THE WORKDAY CAFE
Microsoft Corp. (MSFT) Valuation
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Executive Summary
As a leading software company, Microsoft has securely integrated itself into the workplace of nearly every minor and major business. It's global approach and continuous efforts to innovate has allowed for reliable revenue segments and constant or decreasing operating expenses.
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- $203.49 - Value (PPS) from Industry Relative Valuation
- $191.08 - Value (PPS) from Financial Relative Valuation
- $272.42 - Value (PPS) from Discounted Cash Flow
$227.34 - Reconciled Share Price Estimate
When comparing to Microsoft's current share price of $202.54, a buy recommendation is issued.
Table of Contents
- Company Overview
- Revenue Segments
- The Customers & Revenue Geography
- Distribution Strategies
- Future Strategies
- SWOT Analysis
Company Overview
Microsoft Corp. (MSFT) currently trades on the NASDAQ with a current price of $202.54, a market cap of 1.54 Trillion, and has a fiscal year end of June 30th. All information is in millions of USD except for share prices or marked otherwise.
- $41,160 - Productivity and Business Processes (Azure, Visual Studio, Windows Servers)
- $38,985 - Intelligent Cloud (Office, Skype, Linkedin, Dynamics)
- $45,698 - More Personal Computing (Windows, Surface, Hololens, Xbox, Bing)
The Customers & Revenue Geography
Microsoft's customers include individual consumers, small and medium organizations, large global enterprises, public-sector institutions, Internet service providers, application developers, and OEMs (original equipment manufacturer).
- $64,199 - United States
- $61,644 - Other Countries
Distribution Channels
- Microsoft markets and distributes products and services through the following channels: OEMs, direct, and distributors and resellers.
- The practice is to ship our products promptly upon receipt of purchase orders from customers
- The product distribution system relies on an extensive partner and retail network. OEMs building devices that run our software have also been a significant means of distribution.
Future Strategies
- Cloud: Drive revenue growth and provide a foundation for other products and services
- Enterprise software & services: Enable digital transformation for businesses across industries
- Artificial intelligence: Infuse everything with AI
- Gaming: Build new platforms and experiences supported by exclusive content
- Devices & hardware: Optimize the Windows experience for consumers
- Open source: Build developer trust
Sources: Microsoft Corp.'s 10K & CBInsights
SWOT Analysis
Strengths
- Leading software company
- Vast market reach
- Huge Market Capitalization
- Effective Adverting platform
- Brand reputation
Weaknesses
- Overexposure to the PC market (vulnerable to PC manufacturers)
- Cybercrime theft
- Unsuccessful acquisitions (Mixer)
- Lacking innovation (Hardware sales)
Opportunities
- Cloud business growth
- Innovation and Artificial Intelligence
- Cost leadership strategy
Threats
- Workforce’s related criticisms
- Aggressive competition
- Open source projects
- Piracy
Source: bstrategyhub
Disclaimer
The Workday Cafe is not a registered investment, legal or tax advisor or a broker/dealer. All investment/financial opinions expressed by The Workday Cafe are from the personal research and experience of the evaluator and are intended for informational purposes only. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.