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Why Microsoft Is A Strong Buy According To 20 Top Analysts

Jun. 13, 2018 3:19 PM ET
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.


  • Microsoft has performed well and is expected to grow.
  • Analysts expect investors to buy after giving a strong buy recomendation.
  • Factors in determining if Microsoft and it's balance sheet add up.

Microsoft (MSFT) is one of the greatest success stories in Tech. It has helped revolutionize how we interact with the world and continues to innovate adding possibility globally. Today, we will take a look at the stock to determine why investors are buying now and what to expect in the months ahead. We will be looking at who is recommending Microsoft and some of the indicators that will help us understand where the company is positioned according to, EPS, Earning Surprise, Forecast, momentum, P/E Ratio, Earnings Growth, P/E and growth rates, and Microsoft's PEG ratio.

Analyst Firms Making Recommendations















The firms listed above have all made recommendations to investors. The recommendations range from sell to a strong buy. In addition to the firms listed above I have discovered an additional 10 analyts, 25 in total that, have rated Microsoft. The results, not a single firm suggested a sell recommendation, one analyst expects the company to underperform, three firms are suggesting a hold, one firm is suggesting a buy, and twenty analysts are indicating a strong buy recommendation.

Earnings Per Share Summary

Microsoft the company's EPS since June 2017 to March of 2018 have exceeded the collective weighted average analyst forecast for each and every quarter.Earnings Per Share represents the portion of a company's profit allocated to each outstanding share of common stock. The net income (reported or estimated) for a period divided by the total number of shares outstanding (TSO) during that period. 

Price / Earnings Ratio

Microsoft historically, has had a P/E ratio that is attractive to investors.  Now is no exception.  One of the main factors in determining the strong buy recomendation is Microsoft's current P/E ratio.

Price/Earnings Ratio is a widely used stock evaluation measure. For a security, the Price/Earnings Ratio is given by dividing the Last Sale Price by the Average EPS (Earnings Per Share) Estimate for the specified fiscal time period.

Forecast Earnings Growth

Over the next five years, the analysts that follow Microsoft listed above are expecting it to grow earnings at an average annual rate of 11.96%. This year, analysts are forecasting earnings increase of 15.88% over last year. Analysts expect earnings growth next year of 3.89% over this year's forecasted earnings.

Forecast 12 Month Forward PEG Ratio

The PEG ratio for Microsoft is based on expected earnings for twelve months ending May 2019.  If you wete to look at a graph or a chart it would indicate a highly favorable and attractive image in tbe case of Microsoft over tbe next 12 months.

Investors are always looking for companies with good growth prospects selling at attractive prices. One popular statistic used to identify such stocks is the PEG ratio - which is simply the Price Earnings ratio divided by the growth rate. In this case we use the forecasted growth rate and forecasted earnings over the next 12 months. In theory, the lower the PEG ratio the better - implying that you are paying less for future earnings growth. 

Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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