MSFT – Market expectations are for Uniform ROA to expand, but management may have concerns about their cloud offerings, Teams, and Windows
February 17, 2022
- Microsoft Corporation (MSFT) currently trades at a historical high relative to Uniform earnings, with a 28.1x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to expand to 46% in 2026, accompanied by 7% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to slightly improve to 38% in 2023, accompanied by 10% Uniform asset growth.
- If sustained going forward, these levels would imply a stock price closer to $278, representing approximately 9% equity downside for the firm.
- Moreover, the firm’s most recent earnings call suggests management may have concerns about their cloud offerings, Teams, and Windows.
