MSFT - Embedded Expectations Analysis - 2018 12 10
Microsoft Corporation (MSFT:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 20.6x Uniform P/E. However, even at these levels, the market has bearish expectations, and management may have concerns about Dynamics revenue, the positioning of Azure, and the potential of GitHub as a SaaS opportunitySpecifically, management may lack confidence in their ability to compete and grow in an increasingly digital world, and may be exaggerating the strength of the positioning of Microsoft Teams. Moreover, they may lack confidence in their ability to meet revenue guidance for Dynamics, and in the potential of their strategic partnership with Adobe and SAP. Furthermore, they may be concerned about their ability to bring their Talent Insights analytics solution alongside LinkedIn's workforce insights to create a powerful recruiting solution, and to encrypt data in transit through Azure. Also, they may be exaggerating the uniqueness of their Azure offerings, as well as the traction of their Cosmos DB project. In addition, they may lack confidence in their assertion that GitHub can be a significant SaaS opportunity in the future, and may be exaggerating the extent to which they have improved the popularity and recognition of Azure. Finally, they may be exaggerating the demand for business process automation in the marketplace, and may lack confidence in their ability to sustain strong gross margin growth in commercial cloud
Microsoft is a technology company. The company develops and supports software, services, devices, and solutions. The company provides an array of services, including cloud-based solutions as well as solution support and consulting services. The company also delivers relevant online advertising. The company's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. The company also designs, manufactures, and sells devices, including personal computers, tablets, gaming and entertainment consoles, other devices, and related accessories.
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